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Changes in developmental gene regulatory networks (dGRNs) underlie much of the diversity of life, but the evolutionary mechanisms that operate on interactions with these networks remain poorly understood. Closely related species with extreme phenotypic divergence provide a valuable window into the genetic and molecular basis for changes in dGRNs and their relationship to adaptive changes in organismal traits. Here we analyze genomes, epigenomes, and transcriptomes during early development in two sea urchin species in the genus Heliocidaris that exhibit highly divergent life histories and in an outgroup species. Signatures of positive selection and changes in chromatin status within putative gene regulatory elements are both enriched on the branch leading to the derived life history, and particularly so near core dGRN genes; in contrast, positive selection within protein-coding regions have at most a modest enrichment in branch and function. Single-cell transcriptomes reveal a dramatic delay in cell fate specification in the derived state, which also has far fewer open chromatin regions, especially near dGRN genes with conserved roles in cell fate specification. Experimentally perturbing the function of three key transcription factors reveals profound evolutionary changes in the earliest events that pattern the embryo, disrupting regulatory interactions previously conserved for ~225 million years. Together, these results demonstrate that natural selection can rapidly reshape developmental gene expression on a broad scale when selective regimes abruptly change and that even highly conserved dGRNs and patterning mechanisms in the early embryo remain evolvable under appropriate ecological circumstances.