Asexual bud development in the budding tunicate Polyandrocarpa misakiensis involves transdifferentiation of multipotent epithelial cells, which is triggered by retinoic acid (RA), and thrives under starvation after bud isolation from the parent. This study aimed to determine cell and molecular mechanisms of dedifferentiation that occur during the early stage of transdifferentiation. During dedifferentiation, the numbers of autophagosomes, lysosomes, and secondary lysosomes increased remarkably. Mitochondrial degradation and exosome discharge also occurred in the atrial epithelium. Autophagy-related gene 7 (Atg7) and lysosomal proton pump A gene (PumpA) were activated during the dedifferentiation stage. When target of rapamycin (TOR) inhibitor was administered to growing buds without isolating them from the parent, phagosomes and secondary lysosomes became prominent. TOR inhibitor induced Atg7 only in the presence of RA. In contrast, when growing buds were treated with RA, lysosomes, secondary lysosomes, and mitochondrial degradation were prematurely induced. RA significantly activated PumpA in a retinoid X receptor-dependent manner. Our results indicate that in P. misakiensis, TOR inhibition and RA signals act in synergy to accomplish cytoplasmic clearance for dedifferentiation.