A single line of epidermal seam cells lies along each side of the nematode C. elegans. During normal development, one of these cells, V5, produces a neuroblast that will give rise to a sensory structure, the postdeirid. If seam cells located either anterior or posterior to V5 are ablated however, this neuroblast formation is blocked. Because of this requirement for the presence of adjacent seam cells, we have asked whether V5's ability to produce a neuroblast depends on direct contact with its seam cell neighbors. We find that direct contact between seam cells is required for commitment to neuroblast production. Seam cells lose and reform their contacts with each other as they go through rounds of cell division during larval development. Signaling required for neuroblast formation occurs when the seam cells make contact after their first round of division. If this contact is prevented, no neuroblast is made; when it is delayed, the time of signaling is also delayed. The characteristics of these signals suggest that a seam cell must be part of a continuous epithelium in order to develop normally and that signaling may occur via a cell recognition/cell adhesion pathway. The effect of seam cell ablations on neuroblast formation is altered in mab-5(-) animals, suggesting that this HOM-C gene is part of the pathway by which seam cell signaling controls the decision to make a postdeirid neuroblast.