During larval development in C. elegans, some of the cells of the ventral epidermis, the Pn.p cells, fuse with the growing epidermal syncytium hyp7. The pattern of these cell fusions is regulated in a complex, sexually dimorphic manner. It is essential that some Pn.p cells remain unfused in order for some sex-specific mating structures to be generated. The pattern of Pn.p cell fusion is regulated combinatorially by two genes of the C. elegans Hox gene cluster: lin-39 and mab-5. Some of the complexity in the Pn.p cell fusion pattern arises because these two Hox proteins can regulate each other's activities. We describe a zinc-finger transcription factor, REF-2, that is required for the Pn.p cells to be generated and to remain unfused. REF-2 functions with the Hox proteins to prevent Pn.p cell fusion. ref-2 may also be a transcriptional target of the Hox proteins.