Using degenerate oligonucleotide primers, we isolated the Caenorhabditis remanei orthologue of the C. elegans sex-determining phosphatase gene fem-2 as well as two other protein phosphatase homologues. Despite the significant sequence divergence between C. elegans and C. remanei FEM-2, we used RNAi-mediated gene knockdown to demonstrate that at least some aspects of male development require FEM-2 function in C. remanei. Consistent with this functional conservation, the conspecific interaction between the FEM-2 and the FEM-3 proteins observed in C. elegans also occurs in C. remanei. To further explore whether the rapid evolution of FEM-2 and FEM-3 affects their molecular interactions, we tested for cross-species interactions between the proteins from C. elegans, C. briggsae, and C. remanei. Although all FEM-2/FEM-3 pairs from a single species interact, only two out of six interspecific pairs bind each other, showing that FEM-2 and FEM-3 are coevolving. Both interspecific interactions involved C. briggsae FEM-3. We constructed chimeric versions of FEM-2 consisting of various combinations of the C. elegans and C. remanei proteins. C. briggsae FEM-3 interacted with all the chimeras, even those that did not interact with either C. elegans or C. remanei FEM-3. We hypothesize that the promiscuity of C. briggsae FEM-3 reflects an increased reliance on evolutionarily constrained regions of FEM-2 for binding. If so, our data support the notion that the coevolution of two interacting proteins sometimes involves a shift in the domains that contribute to binding.