An unusual TGF-beta, encoded by the unc-129 gene of C. elegans, regulates axon guidance along the dorsoventral axis of the epidermis/neuroepithelium. This TGF-beta is expressed in neurons and in the dorsal, but not ventral, body muscles. Promoter analysis suggests that it is the dorsal muscle expression that is required for axon guidance. Ectopic expression of UNC-129 in both sets of body muscles using a myosin:unc-129(+) transgene induces axon guidance defects in otherwise wild-type animals. This UNC-129 axon guidance system works in parallel with the better known UNC-6/netrin axon guidance system, which also guides axons along the dorsoventral axis of C. elegans. Interestingly, although mutations in unc-6 and the genes that encode its receptors, unc-5 and unc-40, also affect distal tip cell (DTC) migrations along the dorsoventral axis, unc-129 mutations do not. However, when unc-129 is expressed in both sets of muscles, it induces DTC migration defects like those observed in unc-5,-6,-40 mutants. This suggests that UNC-129 normally does have a minimal redundant effect on DTC migrations, but this effect is masked by UNC-5, -6, and -40 and perhaps by other mechanisms that act in parallel with it.Mutations in unc-130, which encodes a winged helix transcription factor, mimic the phenotypes obtained with the myosin:unc-129 transgene, unc-130 mutants have mild axon guidance defects, are mildly uncoordinated, and have DTC migration defects like those observed in unc-5,-6,-40 mutants. The reason for this phenotype is apparent from the observation that unc-129 reporters are expressed in both sets of muscles in an unc-130 mutant, whereas expression of unc-5,-6, and -40 appear roughly normal in this mutant. This suggests that UNC-130 normally represses UNC-129 expression in the ventral body muscles, a model that fits the phenotypic mimicry of the myosin:unc-129 transgenics. This model also fits the results of unc-129; unc-130 double mutant analysis. These double mutants have significantly fewer DTC migration defects than the unc-130 mutants, suggesting that the absence of unc-129 function is epistatic to the absence of unc-130 function, as it should be if UNC-130 normally inhibits UNC-129 expression. We do not yet know if UNC-129 is acting directly as an axon and cell migration guidance cue or whether it induces the epidermis to form a yet to be discovered cue. The UNC-129 TGF-beta does not act through the classical type I and type II receptors in C. elegans nor does it appear to require Smad function. A genetic screen for UNC-129 signaling components and their eventual molecular characterization may, therefore, identify novel TGF-beta signaling mechanisms involved in axon guidance. The ability of unc-129 mutations to suppress unc-130 mutant DTC migrations provides a paradigm for identifying other components of the UNC-129 signaling cascade.