Cell fates in the sea urchin embryo are remarkably labile, despite the fact that maternal polarity and zygotic programs of differential gene expression pattern the embryo from the earliest stages. Recent work has focused on transcriptional gene regulatory networks (GRNs) deployed in specific embryonic territories during early development. The micromere-primary mesenchyme cell (PMC) GRN drives the development of the embryonic skeleton. Although normally deployed only by presumptive PMCs, every lineage of the early embryo has the potential to activate this pathway. Here, we focus on one striking example of regulative activation of the skeletogenic GRN; the transfating of non-skeletogenic mesoderm (NSM) cells to a PMC fate during gastrulation. We show that transfating is accompanied by the de novo expression of terminal, biomineralization-related genes in the PMC GRN, as well as genes encoding two upstream transcription factors, Lvalx1 and Lvtbr. We report that Lvalx1, a key component of the skeletogenic GRN in the PMC lineage, plays an essential role in the regulative pathway both in NSM cells and in animal blastomeres. MAPK signaling is required for the expression of Lvalx1 and downstream skeletogenic genes in NSM cells, mirroring its role in the PMC lineage. We also demonstrate that Lvalx1 regulates the signal from PMCs that normally suppresses NSM transfating. Significantly, misexpression of Lvalx1 in macromeres (the progenitors of NSM cells) is sufficient to activate the skeletogenic GRN. We suggest that NSM cells normally deploy a basal mesodermal pathway and require only an Lvalx1-mediated sub-program to express a PMC fate. Finally, we provide evidence that, in contrast to the normal pathway, activation of the skeletogenic GRN in NSM cells is independent of Lvpmar1. Our studies reveal that, although most features of the micromere-PMC GRN are recapitulated in transfating NSM cells, different inputs activate this GRN during normal and regulative development.