Marine cartilaginous fish retain a high concentration of urea to maintain the plasma slightly hyperosmotic to the surrounding seawater. In adult fish, urea is produced by hepatic and extrahepatic ornithine urea cycles (OUCs). However, little is known about the urea retention mechanism in developing cartilaginous fish embryos. In order to address the question as to the mechanism of urea-based osmoregulation in developing embryos, the present study examined the gene expression profiles of OUC enzymes in oviparous holocephalan elephant fish (Callorhinchus milii) embryos. We found that the yolk sac membrane (YSM) makes an important contribution to the ureosmotic strategy of the early embryonic period. The expression of OUC enzyme genes was detectable in the embryonic body from at least stage 28, and increased markedly during development to hatching, which is most probably due to growth of the liver. During the early developmental period, however, the expression of OUC enzyme genes was not prominent in the embryonic body. Meanwhile, we found that the mRNA expression of OUC enzymes was detected in the extra-embryonic YSM; the mRNA expression of cmcpsIII in the YSM was much higher than that in the embryonic body during stages 28-31. Significant levels of enzyme activity and the existence of mitochondrial-type cmgs1 transcripts in the YSM supported the mRNA findings. We also found that the cmcpsIII transcript is localized in the vascularized inner layer of the YSM. Taken together, our findings demonstrate for the first time that the YSM is involved in urea-based osmoregulation during the early to mid phase of development in oviparous cartilaginous fish.