A cDNA library prepared from one-cell zygotes of the ascidian Styela clava was screened with probes from isolated cellular fractions to identify clones encoding RNAs localized in the yellow crescent or myoplasm, a cytoskeletal domain with multiple developmental roles. The differential screen yielded five overlapping cDNA (Styela clava yellow crescent or ScYC) clones encoding a 1.2-kb polyadenylated RNA (yellow crescent or YC RNA) which is present throughout embryonic development. In situ hybridization confirmed that YC RNA is localized in the yellow crescent. Antisense probes containing the 3' region of YC RNA hybridize with multiple maternal and zygotic RNAs, suggesting sequence homologies with other transcripts. YC RNA was first detected during oogenesis when transcripts accumulate in the perinuclear region of vitellogenic oocytes and are gradually translocated to the cortex. The YC transcripts are localized in the cortex of unfertilized eggs but after fertilization segregate with the myoplasm to the yellow crescent. During cleavage most YC transcripts enter the primary muscle cell lineage. YC RNA is also present in the secondary muscle cells. The YC transcripts are retained in the myoplasm of oocytes and eggs extracted with the non-ionic detergent Triton X-100, suggesting that they are associated with the cytoskeleton. The nucleotide sequence of the longest ScYC clone contains a short open reading frame (ORF). The YC ORF would encode a putative polypeptide of 49 amino acids, which shows no significant homology to known proteins. Several features of the YC RNA, however, suggest that it functions as an RNA rather than as a protein coding molecule. We conclude that the myoplasm contains a novel maternal RNA which is associated with the cytoskeleton and segregated to the muscle cells during ascidian embryogenesis. The YC RNA may be a new member of a growing family of noncoding RNAs that play important roles in growth and development.