In normal development both the anterior and posterior blastomeres in a 2-cell C. elegans embryo produce some descendants that become muscles. We show that cellular interactions appear to be necessary in order for the anterior blastomere to produce these muscles. The anterior blastomere does not produce any muscle descendants after either the posterior blastomere or one of the daughters of the posterior blastomere is removed from the egg. Moreover, we demonstrate that a daughter of the anterior blastomere that normally does not produce muscles appears capable of generating muscles when interchanged with its sister, a cell that normally does produce muscles. Embryos develop normally after these blastomeres are interchanged, suggesting that cellular interactions play a major role in determining the fates of some cells in early embryogenesis.