A detailed cell lineage of ascidian embryos has been available since the turn of the century. This cell lineage was deduced from the segregation of pigmented egg cytoplasmic regions into particular blastomeres during embryogenesis. The invariant nature of the cell lineage, the segregation of specific egg cytoplasmic regions into particular blastomeres, and the autonomous development of most embryonic cells suggests that cell fate is determined primarily by cytoplasmic determinants. Modern studies have provided strong evidence for the existence of cytoplasmic determinants, especially in the primary muscle cells, yet the molecular identity, localization, and mode of action of these factors are still a mystery. Recent revisions of the classic cell lineage and demonstrations of the lack of developmental autonomy in certain embryonic cells suggest that induction may also be an important mechanism for the determination of cell fate in ascidians. There is strong evidence for the induction of neural tissue and indirect evidence for inductive interactions in the development of the secondary muscle cells. In contrast to the long-accepted dogma, specification of cell fate in ascidians appears to be established by a combination of cytoplasmic determinants and inductive cell interactions.