Vulval differentiation in C. elegans is mediated by an Epidermal growth factor (EGF) -EGF receptor (EGFR) signaling pathway. We have cloned unc-101 and sli-1, negative regulators of vulval differentiation in C. elegans. unc-101 encodes a homolog of AP47, the medium chain of the trans-Golgi clathrin-associated protein complex. Most of the unc-101 alleles are deletions or nonsense mutations, suggesting that these alleles severely reduce the unc-101 activity. We showed that the functions of AP47 are conserved between nematodes and mammals. sli-1 encodes a protein similar to the mammalian proto-oncogene c-cbl. unc-101 mutations can cause a greater than wild type vulval differentiation in combination with certain mutations in sli-1. A mutation in a new gene, rok-1, causes no defect by itself, but causes a greater than wild-type vulval differentiation in the presence of a sli-1 mutation. The unc-101; rok-1; sli-1 triple mutants display a greater extent of vulval differentiation than any double mutant combinations of unc-101, rok-1 and sli-1. Therefore, rok-1 locus defines another negative regulator of the vulval induction pathway.