The Caenorhabditis elegans GATA transcription factor genes elt-1 and elt-3 are expressed in the embryonic hypodermis (also called the epidermis). elt-1 is expressed in precursor cells and is essential for the production of most hypodermal cells (22). elt-3 is expressed in all of the major hypodermal cells except the lateral seam cells, and expression is initiated immediately after the terminal division of precursor lineages (13). Although this expression pattern suggests a role for ELT-3 in hypodermal development, no functional studies have yet been performed. In the present paper, we show that either elt-3 or elt-1 is sufficient, when force expressed in early embryonic blastomeres, to activate a program of hypodermal differentiation even in blastomeres that are not hypodermal precursors in wild-type embryos. We have deleted the elt-3 gene and shown that ELT-3 is not essential for either hypodermal cell differentiation or the viability of the organism. We showed that ELT-3 can activate hypodermal gene expression in the absence of ELT-1 and that, conversely, ELT-1 can activate hypodermal gene expression in the absence of ELT-3. Overall, the combined results of the mutant phenotypes, initial expression times, and our forced-expression experiments suggest that ELT-3 acts downstream of ELT-1 in a redundant pathway controlling hypodermal cell differentiation.