BACKGROUND: TGF-β signaling pathways are involved in the control of development in every member of the animal kingdom. As such, TGF-β ligands are widely divergent yet retain a set of core conserved features, specifically, a pre-protein cleavage site and several conserved ligand domain residues, the disruption of which produces a dominant negative phenotype. RESULTS: We have extended these observations into an invertebrate system by creating a series of loss-of-function Caenorhabditis elegans daf-7 transgenes. When we tested these mutant transgenes in a daf-7/+ background, we saw a molting and excretory canal phenotype. Members of both pathways downstream of daf-4 were required for this phenotype. CONCLUSIONS: Our results show that the basic mechanisms of TGF-β function are conserved across the animal kingdom. A subset of our daf-7 mutations also produced an unexpected and novel phenotype. Epistasis experiments demonstrated that both daf-3/-5 and sma-4/-9 were downstream of our mutant daf-7 transgenes, which suggests not only a role for DAF-7 in the control of molting and the development of the excretory system but also that daf-7 and dbl-1 signaling may converge downstream of their shared Type II receptor, daf-4. Our approach may unveil new roles in development for other invertebrate TGF-β ligands.