The segregation of embryonic endomesoderm into separate endoderm and mesoderm fates is not well understood in deuterostomes. Using sea urchin embryos, we showed that Notch signaling initiates segregation of the endomesoderm precursor field by inhibiting expression of a key endoderm transcription factor in presumptive mesoderm. The regulatory circuit activated by this transcription factor subsequently maintains transcription of a canonical Wnt (cWnt) ligand only in endoderm precursors. This cWnt ligand reinforces the endoderm state, amplifying the distinction between emerging endoderm and mesoderm. Before gastrulation, Notch-dependent nuclear export of an essential beta-catenin transcriptional coactivator from mesoderm renders it refractory to cWnt signals, insulating it against an endoderm fate. Thus, we report that endomesoderm segregation is a progressive process, requiring a succession of regulatory interactions between cWnt and Notch signaling.