Proteins of the tolloid/bone morphogenetic protein (BMP)-1 family play important roles in the differentiation of cell fates, Among those proteins are BMP-1, which plays a role in cartilage and bone formation in mammals, the TOLLOID protein, which is required for the establishment of the dorsoventral axis of Drosophila embryos and BP10/SpAN, which are thought to act in the morphogenesis of sea urchins, These proteins have some properties in common, First, they contain the astacin metalloprotease domain, the CUB domain and the epidermal growth factor-like domain, Second, they are expressed in embryos at stages expected for their role in cell differentiation. Third, at least BMP-1 and TOLLOID are thought to interact with proteins of the transforming growth factor-beta family. We report that the hch-1 gene of the nematode Caenorhabditis elegans encodes a tolloid/BMP-1 family protein, The protein has the characteristic domains common to the tolloid/BMP-1 family, Like other members of the family, it is expressed in embryos, However, the phenotype of hch-1 mutants shows that it is required for normal hatching and normal migration of a post-embryonic neuroblast. Furthermore, in spite of its expression in embryogenesis, it is not required for the viability of embryos, These results show new functions of the tolloid/BMP-1 family proteins and give insight into their evolution.