To investigate the causes and functional significance of rapid sex-determining protein evolution we compared three Caenorhabditis elegans genes encoding members of the protein phosphatase 2C (PP2C) family with their orthologs from another Caenorhabditis species (strain CB5161). One of the genes encodes FEM-2, a sex-determining protein, while the others have no known sex-determining role. FEM-2's PP2C domain was found to be more diverged than the other PP2C domains, supporting the notion that sex-determining proteins are subjected to selective pressures that allow for or cause rapid divergence. Comparison of the positions of amino acid substitutions in FEM-2 with a solved three-dimensional structure suggests that the catalytic face of the protein is highly conserved among C. elegans, CB5161, and another closely related species C. briggsae. However, the non-conserved regions of FEM-2 cannot be said to lack functional importance, since fem-2 transgenes from the other species were unable to rescue the germ-line defect caused by a C. elegans fem-2 mutation. To test whether fem-2 functions as a sex-determining gene in the other Caenorhabditis species we used RNA-mediated interference (RNAi). fem-2 (RNAi) in C. elegans and C. briggsae caused germ-line feminization, but had no noticeable effect in CB5161. Thus the function of fem-2 in CB5161 remains uncertain.