An invariant spatial pattern of three cell fates (3 o -3 o 2 o -1 o -2 o -3 o ) is generated from a field of multipotent precursor cells during C. elegans vulval development. We demonstrate that the epidermal growth factor-like domain of the LIN-3 protein can induce either of two distinct vulval cell fates: a high dose of LIN-3 induces a 1 o fate; a lower dose of LIN-3 induces a 2 o fate. A high dose of LIN-3 can also induce adjacent vulval precursor cells to assume 1 fates; thus, high levels of LIN-3 can override the lateral signaling that normally inhibits formation of adjacent 1 o fates. We propose that the invariant pattern of vulval cell fates is generated by a graded distribution of LIN-3 that promotes different vulval fates according to local concentration and by a lateral signal that reinforces this initial bias.