Retinoic acid (RA) regulates many of the chordate-specific and vertebrate-specific characters. These include the anteroposterior pattern of the dorsally located central nervous system, pharynx with gill slits, neural crest cells, limb morphogenesis and anteroposteriorly organized vertebrae. The necessity of endogenous RA and the RA receptor (RAR) has been demonstrated by mutant analyses, vitamin A-deficient animals and various other methods. Since RAR has been identified only in chordates, the acquisition of the RAR-mediated RA signaling pathway is thought to be an important event for the innovation of the chordate body plan. RA-synthesizing aldehyde dehydrogenases and RA-degrading enzymes also seem to be chordate-specific. The expression pattern of these genes in ascidian embryos is similar to that in vertebrate embryos. These results suggest that the RA signaling cascade, with various regulators and modifiers, had been already well established in the common chordate ancestor. RA also regulates morphogenesis during the asexual reproduction of ascidians, suggesting that RA may also have played a part in producing diversity within the chordate groups.