Ascidians are marine invertebrate chordates. Their tadpole larvae contain a dorsal tubular nervous system, resulting from the rolling up of a neural plate. Along the anterior-posterior axis, the central nervous system (CNS) is organised into a sensory vesicle, neck, trunk ganglion and tail nerve cord and consists of approximately only 330 cells, of which around 100 are thought to be neurons. The organisation of distinct neuronal cell types and neurotransmitter gene expression within the CNS has been described. The unique developmental mode of ascidians, with a small number of cells and a fixed cell division pattern, allows individual cells to be traced throughout development. This feature has led to the complete documentation of the cell lineages of certain cell types in the CNS. Thus a step-by-step understanding of nervous system development from the initial stages of neural induction to the neurogenesis of individual neurons is a feasible goal. The genetic control of neural fate induction and early neural plate patterning are now well understood. The molecular mechanisms specifying the cholinergic neurons of the trunk ganglion as well as the pigment cells of the sensory organs are also well elucidated. In addition, studies have begun on the morphogenetic processes of neurulation. Remaining challenges include building an embryonic atlas integrating gene expression patterns, cell lineage and neuronal cell types as well as developing the gene regulatory networks of cell fate specification and integrating them with the genetic control of morphogenesis.