Ascidians (tunicates) are rich sources of structurally elegant, pharmaceutically potent secondary metabolites and, more recently, potential biofuels. It has been demonstrated that some of these compounds are made by symbiotic bacteria and not by the animals themselves, and for a few other compounds evidence exists supporting a symbiotic origin. In didemnid ascidians, compounds are highly variable even in apparently identical animals. Recently, we have explained this variation at the genomic and metagenomic levels and have applied the basic scientific findings to drug discovery and development. This review discusses what is currently known about the origin and variation of symbiotically derived metabolites in ascidians, focusing on the family Didemnidae, where most research has occurred. Applications of our basic studies are also described.