Development is largely driven by transitions between transcriptional programs. The initiation of transcription at appropriate sites in the genome is a key component of this and yet few rules governing selection are known. Here, we used cap analysis of gene expression (CAGE) to generate bp-resolution maps of transcription start sites (TSSs) across the genome of Oikopleura dioica, a member of the closest living relatives to vertebrates. Our TSS maps revealed promoter features in common with vertebrates, as well as striking differences, and uncovered key roles for core promoter elements in the regulation of development. During spermatogenesis there is a genome-wide shift in mode of transcription initiation characterized by a novel core promoter element. This element was associated with > 70% of transcription in the testis, including the male-specific use of cryptic internal promoters within operons. In many cases this led to the exclusion of trans-splice sites, revealing a novel mechanism for regulating which mRNAs receive the spliced leader. During oogenesis the cell cycle regulator, E2F1, has been co-opted in regulating maternal transcription in endocycling nurse nuclei. In addition, maternal promoters lack the TATA-like element found in vertebrates and have broad, rather than sharp, architectures with ordered nucleosomes. Promoters of ribosomal protein genes lack the highly conserved TCT initiator. We also report an association between DNA methylation on transcribed gene bodies and the TATA-box, which indicates that this ancient promoter motif may play a role in selecting DNA for transcription-associated methylation in invertebrate genomes.