We have used a subtractive procedure to isolate cDNA clones encoding genes expressed differentially in ascidian species with alternate modes of development. The ascidians used in this study were Molgula occulta, which develops a tailed (urodele) larva, and Molgula occulta, which develops a tailless (anural) larva. Two of the identified clones, Uro-2 and Uro-11, are described. Southern blots show that the Uro-2 and Uro-11 genes are present in both species, but the corresponding mRNAs are expressed preferentially in the urodele species. In situ hybridization showed that Uro-2 and Uro-11 transcripts accumulate in small oocytes during oogenesis. The maternal Uro-2 and Uro-11 transcripts were distributed throughout the oocyte cytoplasm. Transcript concentrations declined during vitellogenesis, but mature eggs still contain detectable levels of Uro-2 and Uro-11 mRNA. After fertilization, the maternal Uro-2 and Uro-11 transcripts were localized in the ectoplasm of uncleaved zygotes and mostly entered the ectoderm cells during cleavage. The Uro-2 gene appears to produce only maternal transcripts. In contrast, the Uro-11 gene may also produce zygotic transcripts, which accumulate between gastrulation and neurulation in posterior epidermis, neural and tail muscle cells. Zygotic expression of the Uro-11 gene was not detected in embryos of the anural species. The deduced amino acid sequences of the Uro-2 and Uro-11 cDNAs suggest that they encode novel basic proteins with distinctive structural features. The predicted Uro-2 protein contain, a leucine zipper motif, suggesting that it may dimerize with another protein. The predicted Uro-11 protein contains a nuclear localization signal, a region with similarity to part of the DNA-binding motif in the bacterial histone-like HU and IHF proteins, 12 repeats of the proposed DNA-binding motif S(T)PXX, and a potential zinc finger of the C6 or C6H2 class, suggesting that it may be a DNA-binding protein. The Uro-2 and Uro-11 proteins are candidates for regulatory factors involved in the evolutionary transition from urodele to anural development.