The germline of Caenorhabditis elegans is organized in a linear fashion--the most distal germ cells remain in mitosis, those in the middle enter meiosis and proximal cells differentiate as sperm or oocytes. Two signal transduction pathways control germ cell fates. The glp-1 gene mediates a signal that promotes mitosis and the genes of the sex determination pathway mediate a signal that determines if germ cells will develop as sperm or oocytes. Information from these pathways acts through terminal regulators to specify cell fate. For example, fog-1 and fog-3 are required to initiate spermatogenesis and gld-1 appears to be required to initiate oogenesis. Study of these terminal regulators suggests that the decisions about sexual identity and mitosis are linked in germ cells. We propose a tripartite interaction that forces germ cells to adopt one of only three fates--mitosis, spermatogenesis or oogenesis.