The homologous LAG-2 and APX-1 membrane proteins are putative signaling ligands in the GLP-1/LIN-12 signal-transduction pathway in Caenorhabditis elegans. Normally, LAG-2 and APX-1 mediate distinct cell interactions. Here, we demonstrate that APX-1, which normally interacts with GLP-1 in the early embryo, can substitute for LAG-2 throughout development. When expressed under control of the lag-2 promoter, an apx-1 cDNA can completely rescue a lag-2 null mutant. To substitute for LAG-2, APX-1 must be able to interact with both GLP-1 and LIN-12 receptors and to mediate a variety of cell interactions during development. Therefore, APX-1 and LAG-2 are essentially equivalent in their ability to influence receptor activity. On the basis of this result, we suggest that the existence of multiple-signaling ligands in the LIN-12/GLP-1 signal transduction pathway does not reflect the evolution of functionally distinct proteins but rather the imposition of distinct controls of gene expression upon functionally similar proteins. Finally, we propose that the specification of distinct cell fates by the LIN-12/GLP-1 signal-transduction pathway relies on activities functioning downstream of the ligand and receptor, rather than on specific ligand-receptor interactions.