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At discrete points in development, transient signals are transformed into long-lasting cell fates. For example, the asymmetric identities of two Caenorhabditis elegans olfactory neurons called AWC^ON and AWC^OFF are specified by an embryonic signaling pathway, but maintained throughout the life of an animal. Here we show that the DNA-binding protein NSY-7 acts to convert a transient, partially differentiated state into a stable AWC^ON identity. Expression of an AWC^ON marker is initiated in nsy-7 loss-of-function mutants, but subsequently lost, so that most adult animals have two AWC^OFF neurons and no AWC^ON neurons. nsy-7 encodes a protein with distant similarity to a homeodomain. It is expressed in AWC^ON, and is an early transcriptional target of the embryonic signaling pathway that specifies AWC^ON and AWC^OFF; its expression anticipates future AWC asymmetry. The NSY-7 protein binds a specific …