Cell fate specification during development requires the combinatorial actions of transcription factors and cell-cell signaling. The C. elegans postembryonic mesoderm, or M lineage, is derived from a single multipotent precursor cell, which during hermaphrodite postembryonic development produces 32 cells of six different types. The M lineage therefore provides an excellent system to dissect the regulatory mechanisms underlying fate specification. My thesis work centers around a key transcription factor, SEM-2, which belongs to the SoxC group, and its roles in M lineage development. By analyzing animals carrying a partial loss-of-function mutation in SEM-2, I uncovered previously unappreciated functions and interactions of SEM-2 in M lineage development. First, in addition to its role in specifying a ventral M lineage fate, the sex myoblast (SM) fate, SEM-2 also functions in the dorsal M lineage, where it antagonizes the expression and function of the forkhead transcription factor LET-381/FoxF/C. Second, SEM-2 is not only required for specifying the SM fate, but it is also essential for the proliferation and diversification of the SM lineage, particularly the differentiation of type II vulval muscles required for egg-laying. Third, SEM-2 appears to directly regulate the expression of hlh-8, which encodes a basic helix-loop-helix Twist transcription factor that plays critical roles in the proper patterning of the M lineage. My findings suggest that the SoxC-Twist axis, including the downstream targets of Twist, represents an evolutionarily conserved regulatory cassette important in metazoan development. There are three SoxC proteins in mammals, Sox4, Sox11 and Sox12. Mutations in Sox4 and Sox11 are associated with a neurodevelopmental disorder called Coffin-Siris syndrome (CSS). Many CSS-associated mutations affect conserved residues in SoxC proteins. I introduced a SoxC CSS-associated mutation into sem-2 in worms and confirmed that it is a partial loss-of-function mutation that likely causes defects in humans due to haploinsufficiency. Further phenotypic analysis of the mutant worms revealed that SEM-2 not only functions in the M lineage, but also in other mesodermal tissues, specifically in the defecation muscles, possibly by acting through hlh-8/CeTwist. Altogether, my work identified new interactions in the gene regulatory network underlying C. elegans postembryonic development and adds to the general understanding of the structure-function relationship of SoxC proteins.