In a C. elegans embryo the third cleavages of descendants of the anterior blastomere AB of the 2-cell stage create pairs of blastomeres that develop differently. By laser ablation experiments we show that the fates of all the posterior daughters of this division depend on an induction occurring three cleavages before these blastomeres are born. The time of induction precludes a direct effect on cell fate. Alternatively, we suggest that the induction creates a heritable cell polarity which is propagated through several divisions. We suggest a model to demonstrate how a signal could be propagated through several rounds of cell division. An important implication of our observations is that this early induction acts to specify blastomere identity, not tissue type. A detailed lineage analysis revealed that altering the inductive signal alters complex lineage patterns as a whole. The induction described here, together with two inductions described previously can be used to illustrate how the anterior portion of the C. elegans embryo can be successively subdivided into blastomeres with unique developmental potential.