The deuterostome phyla include Echinodermata, Hemichordata, and Chordata. Chordata is composed of three subphyla, Vertebrata, Cephalochordata (Branchiostoma), and Urochordata (Tunicata). Careful analysis of a new 18S rDNA data set indicates that deuterostomes are composed of two major clades: chordates and echinoderms + hemichordates. This analysis strongly supports the monophyly of each of the four major deuterostome taxa: Vertebrata + Cephalochordata, Urochordata, Hemichordata, and Echinodermata. Hemichordates include two distinct classes, the enteropneust worms and the colonial pterobranchs. Most previous hypotheses of deuterostome origins have assumed that the morphology of extant colonial pterobranchs resembles the ancestral deuterostome. We present a molecular phylogenetic analysis of hemichordates that challenges this long-held view. We used 18S rRNA to infer evolutionary relationships of the hemichordate classes Pterobranchia and Enteropneusta. Our data show that pterobranchs may be derived within enteropneust worms rather than being a sister clade to the enteropneusts. The nesting of the pterobranchs within the enteropneusts dramatically alters our view of the evolution of the chordate body plan and suggests that the ancestral deuterostome more closely resembled a mobile worm-like enteropneust than a sessile colonial pterobranch.