The genes of the myc/max/mad family play an important role in controlling cell proliferation and differentiation. We have identified the first homologues of the mad and max genes in the nematode C. elegans, which we have named mdl-1 and mxl-1 respectively. Like the vertebrate MAD proteins, MDL-1 binds an E-box DNA sequence (CACGTG) when dimerized with MXL-1. However, unlike vertebrate MAX, MXL-1 can not form homodimers and bind to DNA alone. Promoter fusions to a GFP reporter suggest that these genes are coexpressed in posterior intestinal and post-mitotic neuronal cells during larval development. The coexpression in the posterior intestinal cells occurs before their final division at the end of the L1 stage and persists afterwards, demonstrating that mad and max expression can be correlated directly to the cell cycle state of an individual cell type. These data also show that mxl-1 is an obligate partner for mdl-1 in vivo and in vitro and indicate that these genes may play an important role in post-embryonic development. Finally, MDL-1 can suppress activated c-MYC/RAS-induced focus formation in a rat embryo fibroblast transformation assay. Like the vertebrate MAD protein, MDL-1 activity in suppressing transformation is dependent on a functional SIN3 interaction domain.