It has long been understood that morphological evolution occurs through alterations of embryonic development (Gould, 1977; Raff and Kaufman, 1983). The key catalyst to the molecular study of morphological evolution has been the identification and functional characterization of developmental genes in animal model systems beginning in the 1980s. The development of specific body parts and organs was revealed to be orchestrated by networks of patterning genes that encode mostly transcription factors and cell-signaling molecules. It was then gradually realized that the formation of similar body parts and functionally equivalent organs in widely divergent animals is controlled by remarkably similar sets of orthologous pattern-regulating genes that have been conserved over hundreds of million years of evolution (Duboule and Dolle, 1989; Graham et al., 1989; Quiring et al., 1994; De Robertis and Sasai, 1996; Panganiban et al., 1997; Bodmer and Venkatesh, 1998; Carroll et al., 2004). However, the unexpected widespread genetic similarities presented a new paradox: if all animals are built by using similar genetic tools, how did their seemingly endless morphological diversity arise?

A vast body of comparative studies has revealed that morphological differences among taxa are correlated with differences in developmental gene expression patterns, which has supported the proposal that evolutionary modifications of gene expression (i.e., “regulatory evolution”) are the basis of morphological diversification (King and Wilson, 1975; Carroll, 1995). The question of morphological evolution then turned to how such spatial differences in gene expression arise. In principle, gene expression may evolve through changes in either the activity or the deployment of the proteins (primarily transcription factors) that govern gene expression, or in the regulatory sequences that modulate the expression of individual genes (at the DNA or RNA level).

Two clues to the general resolution of these alternatives were emerging from molecular developmental biology by the early 1990s. The first was the structural conservation and functional equivalence of key transcription factors, such as Hox proteins, which indicated that their biochemical activities were not diverging much, if at all (McGinnis et al., 1990; Halder et al., 1995). The second was the discovery of the unexpectedly complex and modular organization of the cis-regulatory regions of pattern-regulating genes (Stanojevic et al., 1991; Davidson, 2001). Most loci encoding pattern-