The nematode exoskeleton is a multilayered structure secreted by the underlying hypodermal cells and mainly composed of small collagens, which are encoded by a large gene family. In previous work, we reported analysis of the C. elegans dpy-31 locus, encoding a hypodermally expressed zinc-metalloprotease of the BMP-1/TOLLOID family essential for viability and cuticle deposition. We have generated a large set of extragenic suppressors of dpy-31 lethality, most of which we show here to be allelic to the cuticle collagen genes sqt-3 and dpy-17. We analyzed the interaction among dpy-31, sqt-3, and dpy-17 using a SQT-3-specific antiserum, which was employed in immunofluorescence experiments. Our results support a role for DPY-31 in SQT-3 extracellular processing and suggest that the SQT-3 C-terminal nontrimeric region serves multiple roles during SQT-3 assembly. Different missense mutations of this region have diverse phenotypic consequences, including cold-sensitive lethality. Furthermore, the biochemical and genetic data indicate that the extracellular assemblies of DPY-17 and SQT-3 are interdependent, most likely because the collagens are incorporated into the same cuticular substructure. We find that absence of DPY-17 causes extensive intracellular retention of SQT-3, indicating that formation of the SQT-3-DPY-17 polymer could begin in the intracellular environment before secretion.