The expression of an Otx homolog in the indirectly developing polychaete Hydroides elegans was characterized during embryo, trochophore, and feeding-larva stages. In the animal hemisphere, HeOtx is first expressed in 1q¹² blastomeres and their immediate descendants. Such discrete embryonic animal hemisphere Otx expression perhaps relates to cell-type specification functions of the larva. During feeding stages, transcripts are detected in adult cerebral ganglia precursors and putative adult eye precursors, where it may have adult brain regionalization functions. HeOtx is not expressed in primary trochoblast precursors, but it is expressed in cells adjacent to the ciliary band. HeOtx is also expressed in a group of cells in the dorsal midline of the early trochophore larva in putative posterior sensory organ precursors. The vegetal hemisphere expression starts in oral and lateral sides of the blastopore and later expands to central blastomeres that lead the gastrulation movements. During late gastrulation stages, the expression declines in foregut precursors, but it is maintained in midgut precursors, suggesting its involvement in tripartite gut subdivision functions. HeOtx broader and earlier endoderm expression correlates with gastrulation by invagination associated with the formation of the feeding trochophore, in contrast with a later and orally restricted Otx expression found in a polychaete that gastrulates by epiboly and forms a non-feeding trochophore. The endoderm expression and functional roles in other bilaterians suggest an ancestral role of Otx related to gastrulation by invagination.