We describe here the functional analysis of the C. elegans LIM homeobox gene lim-6, the ortholog of the mammalian Lmx-1a and b genes that regulate limb, CNS, kidney and eye development. lim-6 is expressed in a small number of sensory-, inter- and motorneurons, in epithelial cells of the uterus and in the excretory system. Loss of lim-6 function affects late events in the differentiation of two classes of GABAergic motorneurons which control rhythmic enteric muscle contraction. lim-6 is required to specify the correct axon morphology of these neurons and also regulates expression of glutamic acid decarboxylase, the rate limiting enzyme of GABA synthesis in these neurons. Moreover, lim-6 gene activity and GABA signaling regulate neuroendocrine outputs of the nervous system. In the chemosensory system lim-6 regulates the asymmetric expression of a probable chemosensory receptor. lim-6 is also required in epithelial cells for uterine morphogenesis. We compare the function of lim-6 to those of other LIM homeobox genes in C. elegans and suggest that LIM homeobox genes share the common theme of controlling terminal neural differentiation steps that when disrupted lead to specific neuroanatomical and neural function defects.