The evolution of special types of cells requires the acquisition of new gene regulatory networks controlled by transcription factors (TFs). In stomatous plants, a TF module formed by subfamilies Ia and IIIb basic helix-loop-helix TFs (Ia-IIIb bHLH) regulates stomatal formation; however, how this module evolved during land plant diversification remains unclear. Here we show that, in the astomatous liverwort Marchantia polymorpha, a Ia-IIIb bHLH module regulates the development of a unique sporophyte tissue, the seta, which is found in mosses and liverworts. The sole Ia bHLH gene, MpSETA, and a IIIb bHLH gene, MpICE2, regulate the cell division and/or differentiation of seta lineage cells. MpSETA can partially replace the stomatal function of Ia bHLH TFs in Arabidopsis thaliana, suggesting that a common regulatory mechanism underlies setal and stomatal formation. Our findings reveal the co-option of a Ia-IIIb bHLH TF module for regulating cell fate determination and/or cell division of distinct types of cells during land plant evolution. In land plants, the Ia and IIIb basic helix-loop-helix (Ia-IIIb bHLH) module regulates stomatal development. This study shows that a Ia-IIIb bHLH heterodimer, MpSETA-MpICE2, regulates seta formation in Marchantia and suggests a common mechanism underlying stomata and setae formation.