Juvenile hormone is an essential regulator of major developmental and life history events in arthropods. Most of the insects use juvenile hormone III as the innate juvenile hormone ligand. By contrast, crustaceans use methyl farnesoate. Despite this difference that is tied to their deep evolutionary divergence, the process of this ligand transition is unknown. Here we show that a single amino-acid substitution in the receptor Methoprene-tolerant has an important role during evolution of the arthropod juvenile hormone pathway. Microcrustacea Daphnia pulex and D. magna share a juvenile hormone signal transduction pathway with insects, involving Methoprene-tolerant and steroid receptor coactivator proteins that form a heterodimer in response to various juvenoids. Juvenile hormone-binding pockets of the orthologous genes differ by only two amino acids, yet a single substitution within Daphnia Met enhances the receptor's responsiveness to juvenile hormone III. These results indicate that this mutation within an ancestral insect lineage contributed to the evolution of a juvenile hormone III receptor system.