The dif-1 gene was identified in a general screen for maternal-effect embryonic lethal (Mel) mutants. dif-1 mutant embryos complete gastrulation and embryonic cell division normally, but then arrest development with only a small amount of tissue differentiation. Either maternal or zygotic dif-1 activity is sufficient for wild-type development. The temperature-sensitive period of a cold-sensitive dif-1 mutant shows that dif-1 activity is essential only for 3 h, corresponding to the major period of embryonic tissue differentiation, and is not required post-embryonically. The results point to a role for dif-1 in the maintenance of tissue differentiation in the developing embryo, but not for its initiation. Cloning and sequencing of the dif-1 gene revealed that its product is homologous to proteins in the mitochondrial carrier family. Although dif-1 activity is required only during embryogenesis, dif-1 RNA is expressed at all stages of development. In situ hybridization to embryos showed that dif-1 RNA is initially present in all cells of the embryo; this most likely corresponds to maternal dif-1 RNA. Later, the presumable zygotic dif-1 RNA is found only in the gut and hypodermis of the embryo. This tissue-specific expression raises the possibility that the dif-1 protein acts non-cell autonomously and that some communication or molecular transport dependent on DIF-1 takes place during embryonic tissue differentiation. dif-1 is the first mitochondrial carrier homologue known to be needed specifically for a developmental process.