Recent work on a diverse array of echinoderm species has demonstrated, as is true in amphibians, that thyroid hormone (TH) accelerates development to metamorphosis. Interestingly, the feeding larvae of several species of sea urchins seem to obtain TH through their diet of planktonic algae (exogenous source), whereas nonfeeding larvae of the sand dollar Peronella japonica produce TH themselves (endogenous source). Here we examine the effects of TH (thyroxine) and a TH synthesis inhibitor (thiourea) on the development of Dendraster excentricus, a sand dollar with a feeding larva. We report reduced larval skeleton lengths and more rapid development of the juvenile rudiment in the exogenous TH treatments when compared to controls. Also, larvae treated with exogenous TH reached metamorphic competence faster at a significantly reduced juvenile size, representing the greatest reduction in juvenile size ever reported for an echinoid species with feeding larvae. These effects of TH on D. excentricus larval development are strikingly similar to the phenotypically plastic response of D. excentricus larvae reared under high food conditions. We hypothesize that exogenous (algae-derived) TH is the plasticity cue in echinoid larvae, and that the larvae use ingested TH levels as an indicator for larval nutrition, ultimately signaling the attainment of metamorphic competence. Furthermore, our experiments with the TH synthesis inhibitor thiourea indicate that D. excentricus larvae can produce some TH endogenously. Endogenous TH production might, therefore, be a shared feature among sand dollars, facilitating the evolution of nonfeeding larval development in that group. Mounting evidence on the effects of thyroid hormones in echinoderm development suggests life-history models need to incorporate metamorphic hormone effects and the evolution of metamorphic hormone production.