Larvae of the nematode Caenorhabditis elegans must choose between reproductive development and dauer diapause. This decision is based on sensing of environmental inputs and dauer pheromone, a small molecule signal that serves to monitor population density. These signals are integrated via conserved neuroendocrine pathways that converge on steroidal ligands of the nuclear receptor DAF-12, a homolog of the mammalian vitamin D receptor and liver X receptor. DAF-12 acts as the main switch between gene expression programs that drive either reproductive development or dauer entry. Extensive studies in the past two decades demonstrated that biosynthesis of two bile acid-like DAF-12 ligands, named dafachronic acids (DA), controls developmental fate. In this issue of PLoS Biology, Wollam et al. showed that a conserved steroid-modifying enzyme, DHS-16, introduces a key feature in the structures of the DAF-12 ligands, closing a major gap in the DA biosynthesis pathway. The emerging picture of DA biosynthesis in C. elegans enables us to address a key question in the field: how are complex environmental signals integrated to enforce binary, organism-wide decisions on developmental fate? Schaedel et al. demonstrated that pheromone and DA serve as competing signals, and that a positive feedback loop based on regulation of DA biosynthesis ensures organism-wide commitment to reproductive development. Considering that many components of DA signaling are highly conserved, ongoing studies in C. elegans may reveal new aspects of bile acid function and lifespan regulation in mammals.