FGFs act in vertebrate mesoderm induction and also play key roles in early mesoderm formation in ascidians and amphioxus. However, in sea urchins initial characterizations of FGF function do not support a role in early mesoderm induction, making the ancestral roles of FGF signaling and mechanisms of mesoderm specification in deuterostomes unclear. In order to better characterize the evolution of mesoderm formation, we have examined the role of FGF signaling during mesoderm development in Saccoglossus kowalevskii, an experimentally tractable representative of hemichordates. We report the expression of an FGF ligand, fgf8/17/18, in ectoderm overlying sites of mesoderm specification within the archenteron endomesoderm. Embryological experiments demonstrate that mesoderm induction in the archenteron requires contact with ectoderm, and loss-of-function experiments indicate that both FGF ligand and receptor are necessary for mesoderm specification. fgf8/17/18 gain-of-function experiments establish that FGF8/17/18 is sufficient to induce mesoderm in adjacent endomesoderm. These experiments suggest that FGF signaling is necessary from the earliest stages of mesoderm specification and is required for all mesoderm development. Furthermore, they suggest that the archenteron is competent to form mesoderm or endoderm, and that FGF signaling from the ectoderm defines the location and amount of mesoderm. When considered in a comparative context, these data support a phylogenetically broad requirement for FGF8/17/18 signaling in mesoderm specification and suggest that FGF signaling played an ancestral role in deuterostome mesoderm formation.