ABSTRACT Vulva development differs between Caenorhabditis elegans and Pristionchus pacificus in several ways. Seven of 12 ventral epidermal cells in P. pacificus die of apoptosis, whereas homologous cells in C. elegans fuse with the hypodermal syncytium. Vulva induction is a one-step process in C. elegans, but requires a continuous interaction between the gonad and the epidermis in P. pacificus. Here we describe several novel cell-cell interactions in P. pacificus, focusing on the vulva precursor cell P8.p and the mesoblast M. P8.p in P. pacificus, unlike its homologous cell in C. elegans, is incompetent to respond to gonadal signaling in the absence of other vulva precursor cells, but can respond to lateral signaling from a neighboring vulval precursor. P8.p provides an inhibitory signal that determines the developmental competence of P(5,7).p. This lateral inhibition acts via the mesoblast M and is regulated by the homeotic gene Ppa-mab-5. In Ppa-mab-5 mutants, M is misspecified and provides inductive signaling to the vulval precursor cells, including P8.p. Taken together, vulva development in P. pacificus displays novel cell-cell interactions involving the mesoblast M and P8.p. In particular, P8.p represents a new ventral epidermal cell type, which is characterized by novel interactions and a specific response to gonadal signaling.