β-catenin is a transcriptional cofactor mediating the "canonical" Wnt signaling pathway, which activates target genes in a complex with TCF (LEF) transcription factors [1]. In many metazoans, embryos are first subdivided during early cleavage stages into nuclear β-catenin-positive and -negative domains, with β-catenin specifying endoderm or mesendoderm fate. This process has been demonstrated in a wide range of phyla including cnidarians, nemerteans, and invertebrate deuterostomes (echinoderms, hemichordates, and ascidians), implying that β-catenin-dependent (mes)endoderm specification is evolutionarily ancient [2-10]. However, the mechanisms leading to the segregation of mesoderm and endoderm fates from a transient mesendodermal state are less well defined. We show that subdivision of the ascidian embryo into the three germ layers involves differential nuclear β-catenin activity coupled with the first two animal-vegetal (A-V)-oriented cell divisions. We reveal that each of these A-V divisions operates as a binary fate choice: the first between ectoderm and mesendoderm and the second between margin (notochord and neural) and endoderm, such that a β-catenin activation sequence of ON-to-ON specifies endoderm, OFF-to-OFF ectoderm, and ON-to-OFF margin.