At discrete points in development, transient signals are transformed into long-lasting cell fates. For example, the asymmetric identities of two Caenorhabditis elegans olfactory neurons called AWC ON and AWC OFF are specified by an embryonic signaling pathway, but maintained throughout the life of an animal. Here we show that the DNAbinding protein NSY-7 acts to convert a transient, partially differentiated state into a stable AWC ON identity. Expression of an AWC ON marker is initiated in nsy-7 loss-of-function mutants, but subsequently lost, so that most adult animals have two AWC OFF neurons and no AWC ON neurons. nsy-7 encodes a protein with distant similarity to a homeodomain. It is expressed in AWC ON , and is an early transcriptional target of the embryonic signaling pathway that specifies AWC ON and AWC OFF ; its expression anticipates future AWC asymmetry. The NSY-7 protein binds a specific optimal DNA sequence that was identified through a complete biochemical survey of 8-mer DNA sequences. This sequence is present in the promoter of an AWC OFF marker and essential for its asymmetric expression. An 11-base-pair (bp) sequence required for AWC OFF expression has two activities: One region activates expression in both AWCs, and the overlapping NSY-7-binding site inhibits expression in AWC ON . Our results suggest that NSY-7 responds to transient embryonic signaling by repressing AWC OFF genes in AWC ON , thus acting as a transcriptional selector for a randomly specified neuronal identity.[Keywords: Homeodomain; olfactory development; transcriptional maintenance; transcriptional repression; activitydependent gene expression; cGMP-dependent protein kinase] Supplemental material is available at http://www.genesdev.org.