The last common ancestor to all extant animals possessed features shared between the most basal metazoan lineage—Porifera—and the rest of the animal kingdom. To identify ancient and conserved developmental processes, we have been investigating embryogenesis and metamorphosis in the demosponge Reniera. Many of the cardinal features of eumetazoan development are displayed during Reniera embryogenesis. Specifically, after fertilization there is a period of cell division with little to no cell growth that results in two obvious cell populations distinguished by size as micromeres and macromeres, and by fate: the small cells differentiate into ciliated cells. This is followed by a period of differential cell activities that produces an embryo consisting of two then three layers, where at least 11 populations of differentiated cells are allocated into the different layers and patterned within these layers. This organization yields a swimming larva with the capacity to sense and respond to the surrounding environment, despite a lack of neurons and a coordinating system. During Reniera embryogenesis, the clearest example of cell patterning is the formation of a ring of pigment cells at the future posterior pole of the larva. Pigment cell pattern formation has two phases, both of which may require the movement of a large number of cells apparently in response to a morphogen gradient. First, pigmented cells, which initially cover the surface of the embryo, migrate to the future posterior end and form a dark spot. Second, the cells move outwards from the spot and rearrange into a ring. Numerous and diverse transcription factor genes are expressed during Reniera embryogenesis, most of which belong to metazoan-specific families and include members of POU, LIMHD, Pax, Bar, Prox2, NK-2, T-box, MEF-2, Fox, Sox, Ets, and nuclear hormone receptor families. In combination, these observations suggest that the last common ancestor to all extant metazoan lineages already possessed the basic regulatory genetic architecture to direct the specification, patterning and differentiation of multiple cell types. Some of these differentiated cells may have been arranged into localised functional units—i.e., simple tissues.