Gene expression in the Caenorhabditis elegans pharynx is regulated in part by organ-specific signals, which in the myo-2 gene target a regulatory sequence called the C sub-element. C sub-element activity requires the organ specification factor PHA-4, a winged-helix transcription factor expressed in all pharyngeal cells. To identify additional factors involved in pharyngeal organogenesis, we performed a yeast one-hybrid screen for C sub-element binding proteins. Here we describe the novel factor PEB-1, which is coexpressed with PHA-4 in many pharyngeal cell types, including muscles, epithelial cells, marginal cells, and glands, but is undetectable in the pharyngeal nervous system. PEB-1 is also detected outside the pharynx in cells surrounding the rectum and vulva, as well as in the germ line. Reduction of peb-1 function using RNAi results in morphological defects in the somatic tissues in which peb-1 is expressed. We have mapped the PEB-1 DNA-binding domain to a 158-residue region, which is unrelated to known DNA-binding proteins but shares some sequence similarity to the Drosophila Mod(mdg4) proteins. PEB-1 specifically recognizes a site in the C subelement that partially overlaps the PHA-4 binding site. Both the PEB-1 and the PHA-4 binding sites are necessary for strong C sub-element enhancer activity in some cells in which these factors are coexpressed. In contrast the PEB-1 site is dispensable for C sub-element activity in pharyngeal neurons. We propose that PEB-1 functions with PHA-4 to activate target gene expression in cells in which they are coexpressed.