The origin of the body plan of our own phylum, Chordata, is one of the most fascinating questions in evolutionary biology. Yet, after more than a century of debate, the evolutionary origins of the neural tube and notochord remain unclear. Here we examine the development of the collar nerve cord in the hemichordate Balanoglossus simodensis and find shared gene expression patterns between hemichordate and chordate neurulation. Moreover, we show that the dorsal endoderm of the buccal tube and the stomochord expresses Hedgehog RNA, and it seems likely that collar cord cells can receive the signal. Our data suggest that the endoderm functions as an organizer to pattern the overlying collar cord, similar to the relationship between the notochord and neural tube in chordates. We propose that the origin of the core genetic mechanisms for the development of the notochord and the neural tube date back to the last common deuterostome ancestor.