Caenorhabditis elegans has three POU homeobox genes, unc-86, ceh-6 and ceh-18. ceh-6 is the ortholog of vertebrate Brn1, Brn2, SCIP/Oct6 and Brn4 and fly Cf1a/drifter/ventral veinless. Comparison of C. elegans and C. briggsae CEH-6 shows that it is highly conserved. C. elegans has only three POU homeobox genes, while Drosophila has five that fall into four families. Immunofluorescent detection of the CEH-6 protein reveals that it is expressed in particular head and ventral cord neurons, as well as in rectal epithelial cells, and in the excretory cell, which is required for osmoregulation. A deletion of the ceh-6 locus causes 80% embryonic lethality. During morphogenesis, embryos extrude cells in the rectal region of the tail or rupture, indicative of a defect in the rectal epithelial cells that express ceh-6. Those embryos that hatch are sick and develop vacuoles, a phenotype similar to that caused by laser ablation of the excretory cell. A GFP reporter construct expressed in the excretory cell reveals inappropriate canal structures in the ceh-6 null mutant. Members of the POU-III family are expressed in tissues involved in osmoregulation and secretion in a number of species. We propose that one evolutionary conserved function of the POU-III transcription factor class could be the regulation of genes that mediate secretion/osmoregulation.