The function of epithelial cell sheets depends on the integrity of specialized cell-cell junctions that connect neighbouring cells. We have characterized the novel coiled-coil protein AJM-1, which localizes to an apical junctional domain of Caenorhabditis elegans epithelia basal to the HMR-HMP (cadherin-catenin) complex. In the absence of AJM-1, the integrity of this domain is compromised. Proper AJM-1 localization requires LET-413 and DLG-1, homologues of the Drosophila tumour suppressors Scribble and Discs large, respectively. DLG-1 physically interacts with AJM-1 and is required for its normal apical distribution, and LET-413 mediates the rapid accumulation of both DLG-1 and AJM-1 in the apical domain. In the absence of both dlg-1 and let-413 function AJM-1 is almost completely lost from apical junctions in embryos, whereas HMP-1 (alpha-catenin) localization is only mildly affected. We conclude that LET-413 and DLG-1 cooperatively control AJM-1 localization and that AJM-1 controls the integrity of a distinct apical junctional domain in C. elegans.