Certain cell fate decisions are specified by cell-cell interactions during the development of the nematode Caenorhabditis elegans. For example, in a wild-type hermaphrodite gonad, two cells, Z1.ppp and Z4.aaa, have the potential to become the anchor cell (AC). Intercellular communication establishes their fates and ensures that only one cell becomes the AC, while the other becomes a ventral uterine precursor cell (VU). One component of this intercellular communication seems to be the 'AC-to-VU' signal from the presumptive AC that causes the other cell to become a VU. Genetic and developmental studies indicated that the lin-12 gene specifies the fates of Z1.ppp and Z4.aaa. Molecular studies suggest that lin-12 directly participates in their communications, perhaps acting as the receptor for the 'AC-to-VU' signal. Here, we report the molecular lesions associated with lin-12 gain-of-function mutations, cell isolation experiments, and genetic studies of an unusual lin-12 allele. These data suggest that self-association of the putative lin-12-encoded receptor leads to its activation, and that certain gain-of-function mutations result in ligand-independent activation.