Members of the Hedgehog (Hh) family are soluble ligands that orchestrate a wide spectrum of developmental processes ranging from left-right axis determination of the embryo to tissue patterning and organogenesis. Tunicates, including ascidians, are the closest relatives of vertebrates, and elucidation of Hh signaling in ascidians should provide an important clue towards better understanding the role of this pathway in development. In previous studies, expression patterns of genes encoding Hh and its downstream factor Gli have been examined up to the tailbud stage in the ascidian embryo, but their expression in the larva has not been reported. Here we show the spatial expression patterns of hedgehog (Ci-hh1, Ci-hh2), patched (Ci-ptc), smoothened (Ci-smo), and Gli (Ci-Gli) orthologs in larvae of the ascidian Ciona intestinalis. The expression patterns of Ci-hh2 and Ci-Gli dramatically change during the period between the late tailbud embryo and the swimming larva. At the larval stage, expression of Ci-Gli was found in a central part of the endoderm and in the visceral ganglion, while Ci-hh2 was expressed in two discrete endodermal regions, anteriorly and posteriorly adjacent to the cells expressing Gli. The expression patterns of these genes suggest that the Hh ligand controls postembryonic development of the endoderm and the central nervous system. Expression of a gene encoding Hh in the anterior and/or pharyngeal endoderm is probably an ancient chordate character; diversification of regulation and targets of the Hh signaling in this region may have played a major role in the evolution of chordate body structures.