Previous studies of vertebrate development have shown that retinoic acid (RA) signaling at the gastrula stage strongly influences anterior-posterior (A-P) patterning of the neurula and later stages. However, much less is known about the more immediate effects of RA signaling on gene transcription and developmental patterning at the gastrula stage. To investigate the targets of RA signaling during the gastrula stage, we used the basal chordate amphioxus, in which gastrulation involves very minimal tissue movements. First, we determined the effect of altered RA signaling on expression of 42 genes (encoding transcription factors and components of major signaling cascades) known to be expressed in restricted domains along the A-P axis during the gastrula and early neurula stage. Of these 42 genes, the expression domains during gastrulation of only four (Hox1, Hox3, HNF3-1 and Wnt3) were spatially altered by exposure of the embryos to excess RA or to the RA antagonist BMS009. Moreover, blocking protein synthesis with puromycin before adding RA or BMS009 showed that only three of these genes (Hox1, Hox3 and HNF3-1) are direct RA targets at the gastrula stage. From these results we conclude that in the amphioxus gastrula RA signaling primarily acts via regulation of Hox transcription to establish positional identities along the A-P axis and that Hox1, Hox3, HNF3-1 and Wnt3 constitute a basal module of RA action during chordate gastrulation.