Ascidian species (Tunicata: Ascidiacea) usually have tailed, hatching tadpole larvae. In several lineages, species have evolved larvae that completely lack any tail tissues and are unable to disperse actively. Some tailless species hatch, but some do not hatch before going through metamorphosis. We show here that ascidian species with the highest speciation rates are those with the largest range sizes and tailed hatching larval development. We use methods for examining diversification in binary characters across a posterior distribution of trees, and show that mode of larval development predicts geographical range sizes. Conversely, we find that species with the least dispersive larval development (tailless, non-hatching) have the lowest speciation rates and smallest geographical ranges. Our speciation rate results are contrary to findings from sea urchins and snails examined in the fossil record, and further work is necessary to reconcile these disparate results.