We have investigated the mechanism of an evolutionary change in ascidian muscle cell differentiation. The ascidiansMolgula oculataandMolgula occultaare closely related species with different modes of development.M. oculataembryos develop into conventional tadpole larvae with a tail containing striated muscle cells, whereasM. occultaembryos develop into tailless larvae with undifferentiated vestigial muscle cells. The muscle actin geneMocuMA1was isolated from anM. oculatagenomic library.MocuMA1is a single-copy, larval-type muscle actin gene which appears to lack introns. However, the 5′ upstream region ofMocuMA1is sufficient to drive expression of alacZfusion construct in the larval muscle cells, implying that it is a functional gene.MocuMA1mRNA first appears in the prospective muscle cells ofM. oculataembryos during gastrulation, and transcripts continue to be present throughout embryogenesis. Muscle actin mRNA was not detected duringM. occultaembryogenesis, although the same probe was capable of detecting muscle actin mRNA in more distantly related ascidian species with tail muscle cells. Interspecific hybrids produced by fertilizingM. occultaeggs withM. oculatasperm recover the ability to express muscle actin mRNA in the vestigial muscle cells, suggesting thattrans-acting factors responsible for muscle actin gene expression are conserved inM. occulta.The presence of thesetrans-acting factors was confirmed by showing that theMocuMA1/lacZfusion construct is expressed in the vestigial muscle cells ofM. occultalarvae. The orthologous larval muscle actin genesMoccMA1aandMoccMA1bwere isolated from aM. occultagenomic library. The coding regions of these genes contain deletions, insertions, and codon substitutions that would make their products nonfunctional. Although the 5′ upstream regions of theM. occultamuscle actin genes also contain numerous changes, expression ofMoccMA1a/lacZandMoccMA1b/lacZfusion constructs showed that they both retain specific promoter activity, although it is reduced inMoccMA1b.The results suggest that the regression of muscle cell differentiation is mediated by changes in the structure of muscle actin genes rather than in thetrans-acting regulatory factors required for their expression.