Development of the nematode Caenorhabditis elegans has been described completely on a cell-by-cell basis. In an invariant pattern five somatic founder cells and the primordial germ cell are generated within the first hour after the onset of cleavage. Using a laser microbeam for manipulation of individual blastomeres several aspects of early embryogenesis have been investigated, including the expression of cellular polarity, the localization of lineage-specific cleavage potential, the necessity for early cell-cell interaction, and the control of differential cell-cycle timing. The experiments demonstrate the central importance of a correct partitioning of cytoplasmic components during early embryogenesis and suggest a stepwise, binary segregation mechanism associated with the unequal cleavages in the germline.