How do genetic programs create features common to a specific cell or tissue type while generating modifications necessary for functional diversification? We have addressed this question using the nematode Caenorhabditis elegans. The dorsal D (DD) and ventral D (VD) motorneurons (mns), referred to collectively as the D mns, compose a cross-inhibitory network that contributes to the animal's sinuous locomotion. The D mns share a number of structural and functional features, but are distinguished from one another by their synaptic patterns and the expression of a neuropeptide gene. Our findings suggest that the similarities and differences are generated at the transcriptional level. UNC-30 contains a homeodomain and activates structural and functional genes expressed in both classes. UNC-55 is a nuclear receptor expressed in the VD mns that is necessary for generating features that distinguish the two classes of D mns from one another. In unc-55 mutants, the VD mns adopt the DD mn synaptic pattern and peptide expression profile. Conversely, ectopic expression of unc-55 in the DD mns causes them to adopt VD mn features. The promoter of the neuropeptide gene expressed in the DD mns contains putative binding sites for both UNC-30 and UNC-55; alteration of these sites suggests that UNC-55 represses the ability of UNC-30 to activate a subset of genes that are expressed in the DD mns but not in the VD mns. Thus UNC-55 acts as a switch for the features that distinguish these two functionally related classes of mns.