We show that during Caenorhabditis elegans male spicule development, the specification of a glial versus neuronal cell fate in a canonical neurogenic sublineage is dependent on Wnt signaling. Inactivation of a Wnt signaling pathway mediated by the Wnt receptor LIN-17 transforms the SPD sheath cell into its sister, the SPD neuron. We discovered a new mutant, son-1, that displays this same cell fate transformation. The son-1 mutation enhances the phenotypes of reduction-of-function lin-17 mutants in several developmental processes, including vulva development, somatic gonad development, and male tail patterning. son-1 encodes an HMG1/2-like DNA-binding protein and is localized in all cell nuclei through development as revealed by a GFP reporter construct. Disruption of son-1 function by RNA-mediated interference results in the same spicule defect as caused by overexpression of POP-1, a TCF/LEF class HMG protein known to act downstream of the Wnt signaling pathway. Our results provide in vivo evidence for the functional involvement of an HMG1/2-like protein, SON-1, in Wnt signaling. The sequence nonspecific HMG protein SON-1 and the sequence specific HMG protein POP-1 might both act in the Wnt responding cells to regulate gene transcription in opposite directions.