THE lin-12 and glp-1 genes of Caenorhabditis elegans encode members of the Notch family of transmembrane proteins(1,2). Genetic studies indicate that the lin-12 and glp-1 proteins act as receptors in specific developmental cell interactions(3-6) and that their functions are partially redundant(7). lin-12 glp-1 double mutants display certain embryonic defects not found in either single mutant(7,8). The phenotype of this double mutant is called Lag, and recessive mutations in either of the genes lag-1 or lag-2 can also result in the Lag phenotype(7), indicating that these two genes may participate in the same cell interactions that require lin-12 or glp-1. We report here that lag-2 encodes a predicted transmembrane protein of 402 amino acids. The predicted extracellular region of lag-2 is similar to amino-terminal regions of Delta and Serrate, two Drosophila proteins that are thought to function as ligands for Notch(9-14). The region of similarity includes sequences related to epidermal growth factor (EGF) repeats. We have isolated lag-2(sa37), a dominant allele that shows specific genetic interactions with lin-12. The sa37 mutation causes a Gly-->Asp change in a conserved residue of an EGF motif. Because of its overall structure, its sequence similarity to Delta and Serrate, and its genetic interactions, ne suggest that lag-2 encodes an intercellular signal for the lin-12 and glp-1 receptors.