The Caenorhabditis elegans hermaphrodite nervous system is composed of 302 neurons that fall into at least 118 diverse classes. Here we describe cfi-1, a gene that contributes to the development of neuronal diversity. cfi-1 promotes appropriate differentiation of the URA sensory neurons and inhibits URA from expressing the male-specific CEM neuronal fate. The UNC-86 POU homeodomain protein is present in CEM and URA neurons, and can promote expression of CEM-specific genes in both CEM and URA, but CFI-1 inhibits expression of these genes in the URA cells. cfi-1 also promotes appropriate differentiation and glutamate receptor expression in the AVD and PVC interneurons. cfi-1 encodes a conserved neuron-and muscle-restricted DNA-binding protein containing an A/T rich interaction domain (ARID). ARID proteins regulate early patterning and muscle fate in Drosophila, but they have not previously been implicated in the control of neuronal subtype identity. In the mammalian nervous system thousands of cell types can be distinguished based on position, gene expression, connectivity, and function. Even in the nematode Caenorhabditis elegans, where the nervous system is composed of only 302 neurons, these can be divided into at least 118 different classes (Sulston and Horvitz 1977;Sulston et al. 1983;White et al. 1986). How is this multitude of neuron types generated? Studies in mammals and in C. elegans suggest that lineage-intrinsic mechanisms are important for the generation of this diversity. Transcriptional regulators that are induced during early development play key roles in determining neuronal subtype identity (Sengupta and Bargmann 1996;Tanabe and Jessell 1996), and are expressed in complex, overlapping patterns.The expression of a particular repertoire of neuronspecific proteins results from the integration of functions of multiple transcription factors. In one well-characterized example, the hermaphrodite-specific neuron (HSN) of C. elegans, which regulates egg-laying, integrates inputs from the position of the cell, the sex of the animal, and its developmental state to achieve its terminally differentiated fate. These cues control HSN differentiation by regulating the expression of an assortment of specific transcriptional regulators. The HSN is born in the tail region of the animal (Sulston et al. 1983), and during embryogenesis its identity is specified, in part, by the tail-restricted homeodomain protein EGL-5 (Desai et al. 1988;Chisholm 1991). Appropriate expression of EGL-5 then allows the HSN to migrate from its early posterior position to its final medial position in the animal. At roughly the same time, the sex-determination pathway, in the form of the zinc-finger transcription factor TRA-1, regulates expression of the programmed cell death gene egl-1 to promote HSN survival in hermaphrodites and death in males (Conradt and Horvitz 1999). In the fourth larval stage (L4), inputs from genes that control developmental timing, such as the period-related gene lin-42, promote HSN terminal differentiation. The...