The DAF-7/TGF-beta pathway in C. elegans interprets environmental signals relayed through amphid neurons and actively inhibits dauer formation during reproductive developmental growth . In metazoans, the STAT pathway interprets external stimuli through regulated tyrosine phosphorylation, nuclear translocation, and gene expression , but its importance for developmental commitment, particularly in conjunction with TGF-beta, remains largely unknown. Here, we report that the nematode STAT ortholog STA-1 accumulated in the nuclei of five head neuron pairs, three of which are amphid neurons involved in dauer formation . Moreover, sta-1 mutants showed a synthetic dauer phenotype with selected TGF-beta mutations. sta-1 deficiency was complemented by reconstitution with wild-type protein, but not with a tyrosine mutant. Canonical TGF-beta signaling involves the DAF-7/TGF-beta ligand activating the DAF-1/DAF-4 receptor pair to regulate the DAF-8/DAF-14 Smads . Interestingly, STA-1 functioned in the absence of DAF-7, DAF-4, and DAF-14, but it required DAF-1 and DAF-8. Additionally, STA-1 expression was induced by TGF-beta in a DAF-3-dependent manner, demonstrating a homeostatic negative feedback loop. These results highlight a role for activated STAT proteins in repression of dauer formation. They also raise the possibility of an unexpected function for DAF-1 and DAF-8 that is independent of their normal upstream activator, DAF-7.