Mutations in the gene unc-86 affect development of the nematode C. elegans by altering cell lineages and cell differentiation. We molecularly cloned unc-86 by chromosomal walking from linked polymorphic genetic loci, and identified the gene by locating polymorphisms specific for unc-86 alleles. A transcript containing a 467 amino acid open reading frame was inferred from the DNA sequence of a genomic clone. The unc-86 transcript encodes a protein containing a 158 amino acid sequence, referred to as the pou ("pow") domain, which is strikingly similar to sequences found in three mammalian transcription factors. Within this conserved region, there is a homeodomain related to but distinct from homeodomains previously identified in Drosophila and other organisms. These findings suggest that unc-86 encodes a transcription factor, and that the related mammalian transcription factors may function to control cell fates and cell differentiation.