The first chordates appear in the fossil record at the time of the Cambrian explosion, nearly 550 million years ago. The modern ascidian tadpole represents a plausible approximation to these ancestral chordates. To illuminate the origins of chordate and vertebrates, we generated a draft of the protein-coding portion of the genome of the most studied ascidian, Ciona intestinalis. The Ciona genome contains approximately 16,000 protein-coding genes, similar to the number in other invertebrates, but only half that found in vertebrates. Vertebrate gene families are typically found in simplified form in Ciona, suggesting that ascidians contain the basic ancestral complement of genes involved in cell signaling and development. The ascidian genome has also acquired a number of lineage-specific innovations, including a group of genes engaged in cellulose metabolism that are related to those in bacteria and fungi.