The cellular and molecular features of multipotent epithelial cells during regeneration and asexual reproduction in colonial tunicates are described in the present study. The epicardium has been regarded as the endodermal tissue-forming epithelium in the order Enterogona, because only body fragments having the epicardium exhibit the regenerative potential. Epicardial cells in Polycitor proliferus have two peculiar features; they always accompany coelomic undifferentiated cells, and they contain various kinds of organelles in the cytoplasm. During strobilation a large amount of organelles are discarded in the lumen, and then, each tissue-forming cell takes an undifferentiated configuration. Septum cells in the stolon are also multipotent in Enterogona. Free cells with a similar configuration to the septum inhabit the hemocoel. They may provide a pool for epithelial septum cells. At the distal tip of the stolon, septum cells are columnar in shape and apparently undifferentiated. They are the precursor of the stolonial bud. In Pleurogona, the atrial epithelium of endodermal origin is multipotent. In Polyandrocarpa misakiensis, it consists of pigmented squamous cells. The cells have ultrastructurally fine granules in the cytoplasm. During budding, coelomic cells with similar morphology become associated with the atrial epithelium. Then, cells of organ placodes undergo dedifferentiation, enter a cell division cycle, and commence morphogenesis. Retinoic acid-related molecules are involved in this dedifferentiation process of multipotent cells. We conclude that in colonial tunicates two systems support the flexibility of tissue remodeling during regeneration and asexual reproduction; dedifferentiation of epithelial cells and epithelial transformation of coelomic free cells.