We undertook a detailed ultrastructural investigation to gain insight into the early stages of development of the vermiform myxozoan, Buddenbrockia plumatellae Schröder, 1910 in two bryozoan hosts. Early cell complexes arise in the peritoneum after division and migration of isolated cells in the host body wall. The development of cell junctions linking the outer (mural) cells of the complex then produces a sac enclosing a mass of inner cells. Elongation to the vermiform stage (myxoworm) occurs during multiplication and reorganisation of the inner cells as a central core within the single-layered sac wall. The core cells develop into muscle and sporogonic cells separated from the mural cells by a basal lamina. Myogenesis occurs along the length of the myxoworm from cells that differentiate from the central core, and is independent of elongation. Four primary sporogonic cells maintain positions close to the basal lamina, between muscle cells, while giving rise to secondary sporogonic cells that eventually become free in the central cavity. At least some secondary sporogonic cells undergo meiosis. In view of the recent confirmation of the phylogenetic affinity of Buddenbrockia with the Cnidaria, we postulate how features observed in Buddenbrockia may be homologous with cnidarian structures. Finally we propose a new family name, Buddenbrockiidae, to replace Saccosporidae which was proposed previously in breach of the International Code of Zoological Nomenclature.