Otx homeodomain transcription factors have been studied in a variety of eumetazoan animals where they have roles in anterior neural development, endomesoderm formation, and the formation of larval ciliated fields. Here, we describe the gene structure and developmental expression of three Otx loci in the starlet sea anemone, Nematostella vectensis (phylum Cnidaria; class Anthozoa). Nematostella's three Otx genes (OtxA, OtxB, and OtxC) are located in a compact genomic cluster spanning 63.6 kb. The homeodomains of all three Otx genes are highly similar to their bilaterian counterparts, but only OtxB exhibits the conserved WSP motif that is located downstream of the homeodomain in many Otx proteins. The genomic organization, in concert with phylogenetic analyses, indicates that two tandem duplications occurred in the lineage leading to Nematostella some time after the Cnidaria diverged from the Bilateria. In situ hybridization reveals that otx is initially expressed by invaginating mesendodermal cells in the gastrula. Later, each of the three otx paralogs is expressed in three discrete larval body regions: in the endoderm of the foot or physa, in an endodermal ring surrounding the pharynx, and in the ectoderm of the tentacles. These data suggest that a single otx locus had already acquired diverse developmental functions in the cnidarian-bilaterian ancestor. Furthermore, following two gene duplications in the line leading to Nematostella, there have been only minor alterations in the spatiotemporal expression of the three Otx paralogs. However, the absence of a conserved protein domain in OtxA and OtxC suggests functional evolution of the protein itself.