Growth factors and the extracellular matrix have been shown to fulfill vital developmental roles in many embryonic systems. Our hypothesis is that a developmental role played by the extracellular matrix in sea urchins may be the binding of a PDGF-like growth factor to promote signaling activity. We report here that anti-human PDGF-B antibodies and anti-human TGF-alpha antibodies immunoprecipitated specific proteins isolated from Lytechinus embryos. Addition of these antibodies to Lytechinus embryos inhibited gastrulation and spiculogenesis. The embryos are sensitive to the antibodies from the four-cell through the hatching blastula stages, which suggests that the TGF-alpha-like and PDGF-like ligands are required for the early differentiation of the gut and spicules. We present evidence that the PDGF-like growth factor depends on the extracellular matrix for signaling activity. Synthetic peptides representing the heparan sulfate proteoglycan binding sequence on human PDGF-B were added to Lytechinus embryo cultures to compete for binding sites with the endogenous PDGF-like growth factor. The experimental peptide inhibited gastrulation and caused radially arranged multiple spicules to form. Development was unaffected by a control peptide. These studies support our hypothesis and suggest that TGF-alpha-like and PDGF-like growth factors induce signaling events required for sea urchin gastrulation and spiculogenesis and suggest that an extracellular matrix-associated PDGF-like growth factor is involved in differentiation along the oral-aboral axis.