In the nematode Caenorhabditis elegans, germ cells arise from early embryonic cells called germline blastomeres. Cytoplasmic structures called P granules are present in the fertilized egg and are segregated into each of the germline blastomeres during the first few cleavages of the embryo. Mutations in the maternally expressed gene mex-1 disrupt the segregation of P granules, prevent the formation of germ cells, and cause inappropriate patterns of somatic cell differentiation. We have cloned the mex-1 gene and determined the distribution pattern of the mex-1 gene products. The MEX-1 protein contains two copies of an unusual 'finger' domain also found in the PIE-1 protein of C. elegans. PIE-1 has been shown to be expressed in germline blastomeres, and is a component of P granules. We show here that MEX-1 also is present in germline blastomeres and is a P granule component, although MEX-1 is a cytoplasmic protein while PIE-1 is present in both the nucleus and cytoplasm. We further show that MEX-1 is required to restrict PIE-1 expression and activity to the germline blastomeres during the early embryonic cleavages.