Transcription factors encoded by the Forkhead (Fox) gene family have diverse, sometimes conserved, regulatory roles in eumetazoan development, immunity, and physiology. Although this gene family includes members that predate the origin of the animal kingdom, the majority of metazoan Fox genes evolved after the divergence of animals and choanoflagellates. Here, we characterize the composition, structure, and expression of Fox genes in the marine demosponge Amphimedon queenslandica to better understand the origin and evolution of this family. The Fox gene repertoire in A. queenslandica appears to be similar to the ancestral metazoan Fox gene family. All 17 A. queenslandica Fox genes are differentially expressed during development and in adult cell types. Remarkably, eight of these, all of which appear to be metazoan‐specific, are induced within just 1 h of larval settlement and commencement of metamorphosis. Gene co‐expression analyses suggest that these eight Fox genes regulate developmental and physiological processes similar to their roles in other animals. These findings are consistent with Fox genes playing deeply ancestral roles in animal development and physiology, including in response to changes in the external environment.