Organization into gene clusters is an essential and diagnostic feature of Hox genes. Insect and nematode genomes possess single Hox gene clusters (split in Drosophila); in mammals, there are 38 Hox genes in four clusters on different chromosomes. A collinear relationship between chromosomal position, activation time and anterior expression limit of vertebrate Hox genes suggests that clustering may be important for precise spatiotemporal gene regulation and hence embryonic patterning. Hox genes have a wide phylogenetic distribution within the metazoa, and are implicated in the control of regionalization along the anteroposterior body axis. It has been suggested that changes in Hox gene number and genomic organization played a role in metazoan body-plan evolution, but identifying significant changes is difficult because Hox gene organization is known from only very few and widely divergent taxa (principally insects, nematodes and vertebrates). Here we analyse the complexity and organization of Hox genes in a cephalochordate, amphioxus, the taxon thought to be the sister group of the vertebrates. We find that the amphioxus genome has only one Hox gene cluster. It has similar genomic organization to the four mammalian Hox clusters, and contains homologues of at least the first ten paralogous groups of vertebrate Hox genes in a collinear array. Remarkably, this organization is compatible with that inferred for a direct ancestor of the vertebrates; we conclude that amphioxus is a living representative of a critical intermediate stage in Hox cluster evolution.