Retinoic acid (RA)-mediated expression of the homeobox gene Hox1 is a hallmark of the chordate central nervous system (CNS). It has been suggested that the RA-Hox1 network also functions in the epidermal ectoderm of chordates. Here, we show that in the urochordate ascidian Ciona intestinalis, RA-Hox1 in the epidermal ectoderm is necessary for formation of the atrial siphon placode (ASP), a structure homologous to the vertebrate otic placode. Loss of Hox1 function resulted in loss of the ASP, which could be rescued by expressing Hox1 in the epidermis. As previous studies showed that RA directly upregulates Hox1 in the epidermis of Ciona larvae, we also examined the role of RA in ASP formation. We showed that abolishment of RA resulted in loss of the ASP, which could be rescued by forced expression of Hox1 in the epidermis. Our results suggest that RA-Hox1 in the epidermal ectoderm played a key role in the acquisition of the otic placode during chordate evolution.