Comparative analysis between Caenorhabditis elegans and other nematode species offers a powerful approach to study gene function. C. elegans also has great potential as a surrogate expression system to study the function of genes from parasitic nematode species where transgenic methodologies are unavailable. However there is little information on the extent to which the biology of C. elegans is conserved with other nematode species and very few parasitic nematode genes have yet been functionally expressed in C. elegans. We have identified and characterised a homologue of the C. elegans GATA transcription factor elt-2, a central regulator of endoderm development, from the parasitic nematode Haemonchus contortus. The H. contortus ELT-2 polypeptide is present in endoderm nuclei throughout embryonic and post-embryonic development, except for in the infective L3 stage, and our experiments reveal that the development of the H. contortus endodermal lineage is strikingly similar to that of C. elegans. Sequence conservation between the H. contortus and C. elegans ELT-2 polypeptides broadly reflects function since the major region of sequence identity corresponds to the DNA binding domain. However, the overall level of sequence identity is remarkably low with the only other major region of identity corresponding to an unusual zinc finger domain. In spite of this, ectopic expression of the H. contortus elt-2 gene in transgenic C. elegans is sufficient to activate a programme of endodermal differentiation demonstrating that function is highly conserved. This approach of ectopic expression using an inducible promoter provides an effective way in which to use C. elegans for the in vivo functional analysis of parasitic nematode genes.