Developmental signaling by retinoic acid (RA) is thought to be an innovation essential for the origin of the chordate body plan. The larvacean urochordate Oikopleura dioica maintains a chordate body plan throughout life, and yet its genome appears to lack genes for RA synthesis, degradation, and reception. This suggests the hypothesis that the RA-machinery was lost during larvacean evolution, and predicts that Oikopleura development has become independent of RA-signaling. This prediction raises the problem that the anterior-posterior organization of a chordate body plan can be developed without the classical morphogenetic role of RA. To address this problem, we performed pharmacological treatments and analyses of developmental molecular markers to investigate whether RA acts in anterior-posterior axial patterning in Oikopleura embryos. Results revealed that RA does not cause homeotic posteriorization in Oikopleura as it does in vertebrates and cephalochordates, and showed that a chordate can develop the phylotypic body plan in the absence of the classical morphogenetic role of RA. A comparison of Oikopleura and ascidian evidence suggests that the lack of RA-induced homeotic posteriorization is a shared derived feature of urochordates. We discuss possible relationships of altered roles of RA in urochordate development to genomic events, such as rupture of the Hox-cluster, in the context of a new understanding of chordate phylogeny.