Lithodoid and paguroid crabs are morphologically assigned to the superfamilies Lithodoidea and Paguroidea, respectively. Molecular analyses, however, have revealed closer genetic proximity of the lithodoid crabs to the family Paguridae than to other families of Paguroidea, provoking a long debate. We investigated the length and nucleotide sequence variation of the nuclear ribosomal DNA internal transcribed spacer 1 (ITS1) in lithodoid and paguroid species. Uniquely short ITS1s (215 to 253 bp) were observed in seven lithodoid species belonging to the families Lithodidae and Hapalogastridae. In contrast, ITS1 length varied considerably in 13 paguroid species belonging to the families Coenobitidae, Diogenidae, and Paguridae. Short to long ITS1s (238 to 1090 bp) were observed in five species of the family Paguridae, and medium to long ITS1s (573 to 1166 bp) were observed in eight species of the families Coenobitidae and Diogenidae. Interestingly, ITS1s of considerably different sizes coexist in individual paguroid species. Nucleotide sequence analysis indicated that the short ITS1s observed in the family Paguridae were descendants of longer ITS1s and were homologous to the short ITS1 of lithodoid species. ITS1 sequences of the families Coenobitidae and Diogenidae shared no nucleotide elements similar to those of lithodoid and pagurid species. These molecular signals indicate that the short ITS1 in pagurid lineage was passed on to lithodoid lineage, strongly supporting the hermit to king crab hypothesis.