The tadpole larvae prosencephalon of the ascidian Ciona intestinalis contains a single large ventricle, along the inner walls of which lie two sensory organs: the otolith (a gravity-sensing organ) and the ocellus (a photo-sensing organ composed of a single cup-shaped pigment cell, about 20 photoreceptor cells, and three lens cells). Comparison has been drawn between the morphology and physiology of photoreceptor cells in the ascidian ocellus and the vertebrate eye. The development of vertebrate and invertebrate eyes requires the activity of several conserved genes and it is regulated by precise expression patterns and cell fate decisions common to several species. We have isolated a Ciona homeobox gene (Ci-Rx) that belongs to the paired-like class of homeobox genes. Rx genes have been identified from a variety of organisms and have been demonstrated to have a role in vertebrate eye formation. Ci-Rx is expressed in the anterior neural plate in the middle tailbud stage and subsequently in the larval stage in the sensory vesicle around the ocellus. Loss of Ci-Rx function leads to an ocellus-less phenotype that shows a loss of photosensitive swimming behavior, suggesting the important role played by Ci-Rx in basal chordate photoreceptor cell differentiation and ocellus formation. Furthermore, studies on Ci-Rx regulatory elements electroporated into Ciona embryos using LacZ or GFP as reporter genes indicate the presence of Ci-Rx in pigment cells, photoreceptors, and neurons surrounding the sensory vesicle. In Ci-Rx knocked-down larvae, neither basal swimming activity nor shadow responses develop. Thus, Rx has a role not only in pigment cells and photoreceptor formation but also in the correct development of the neuronal circuit that controls larval photosensitivity and swimming behavior. The results suggest that a Ci-Rx "retinal" territory exists, which consists of pigment cells, photoreceptors, and neurons involved in transducing the photoreceptor signals.