The regulating potential along the animal–vegetal axis of a direct developing echinoid, Peronella japonica, was investigated using LiCl. Animal caps isolated from 16‐cell stage P. japonica embryos developed to permanent blastulae with an amniotic cavity. Treatment of animal caps with LiCl induced them to vegetalize with differentiation of the endoderm and subsequently develop into pluteus‐like larvae. The larvae derived from the LiCl‐treated animal caps were able to metamorphose and establish an adult body plan. A considerable fraction of whole embryos treated with LiCl exogastrulated and/or evaginated an amniotic cavity. The timing of the sensitivity to LiCl‐mediated induction of evagination of the amniotic cavity was earlier than that for exogastrulation. Peronella japonica embryos became sensitive to LiCl induction of exogastrulation later than embryos of indirect developers. Some larvae with evaginated archenteron and/or evaginated amniotic cavity had metamorphic potential. These results suggest that LiCl can induce both vegetalization and evagination of invaginating structures. The present study is the first to show the potential of the presumptive ectoderm region to regulate the establishment of the adult body plan without any influence from other blastomeres, revealing that the regulating potential of sea urchin embryos is much larger than previously thought.