Background: The transfer of genetic material from non-parent organisms is called horizontal gene transfer (HGT). One of the most conclusive cases of HGT in metazoans was previously described for the cellulose synthase gene in ascidians. Results: In this study we identified a new protein, rusticalin, from the ascidian Styela rustica and presented evidence for its likely origin by HGT. Discernible homologues of rusticalin were found in placozoans, coral, and basal Chordates. Rusticalin was predicted to consist of two distinct regions, an N-terminal domain and a C-terminal domain. The N-terminal domain comprises two cysteine-rich repeats and shows remote similarity to the tick carboxypeptidase inhibitor. The C-terminal domain shares significant sequence similarity with bacterial MD peptidases and bacteriophage A500 L-alanyl-D-glutamate peptidase. A possible transfer of the C-terminal domain by bacteriophage was confirmed by an analysis of noncoding sequences of C. intestinalis rusticalin-like gene, which was found to contain a sequence similar to the bacteriophage A500 recombination site. Moreover, a sequence similar to the bacteriophage recombination site was found to be adjacent to the cellulose synthase catalytic subunit gene in the genome of Streptomices sp., the donor of ascidian cellulose synthase. Conclusions: The C-terminal domain of rusticalin and rusticalin-like proteins is likely to be horizontally transferred by the bacteriophage A500. A common mechanism involving bacteriophage mediated gene transfer can be proposed for at least two HGT events in ascidians.