The adult ascidian neural complex forms from a thin tube called the neurohypophyseal duct and from the primordium of the cerebral ganglion from the sensory vesicle in metamorphosing larvae. Neurohypophyseal duct cells, located in the anterior left side of the sensory vesicle of swimming larvae, are derived from the anterior embryonic neural plate, which expresses common transcription factors in vertebrates and urochordates. The cerebral ganglion primordium is probably derived from the posterior sensory vesicle during metamorphosis. After metamorphosis begins, the duct elongates anteriorly and fuses with the stomodeal ectoderm, where the dorsal tubercle, a large ciliated structure that opens into the upper part of the pharynx, later develops. The rudiment of the cerebral ganglion and the duct elongate posteriorly. The duct also differentiates into the neural gland. The dorsal wall of the neural gland in adult ascidians has a thick epithelium (placode), the central part of which forms the dorsal strand by repeated invaginations along the visceral nerve. Both gonadotropin-releasing hormone (GnRH) neurons and prolactin-like (non-GnRH) neurons are generated in the dorsal strand and migrate to the cerebral ganglion along the visceral nerve throughout adulthood. Thus, the epithelium derived from the neurohypophyseal duct possesses neurogenic potential to generate neural stem cells of the central (cerebral ganglion) and peripheral (dorsal strand) nervous systems. The generation of prolactin-like neurons and their migration into the brain with GnRH neurons suggest that the ascidian dorsal strand is homologous to the craniate olfactory placode, and provide unequivocal support for the existence of the clade Olfactores.