Understanding transdifferentiation-the conversion of one differentiated cell type into another-is important from both basic science and clinical perspectives. In Caenorhabditis elegans, an epithelial cell named Y is initially part of the rectum but later appears to withdraw, migrate, and then become a motor neuron named PDA. Here, we show that this represents a bona fide transdifferentiation event: Y has epithelial hallmarks without detectable neural characteristics, and PDA has no residual epithelial characteristics. Using available mutants and laser microsurgery, we found that transdifferentiation does not depend on fusion with a neighboring cell or require migration of Y away from the rectum, that other rectal epithelial cells are not competent to transdifferentiate, and that transdifferentiation requires the EGL-5 and SEM-4 transcription factors and LIN-12/Notch signaling. Our results establish Y-to-PDA transdifferentiation as a genetically tractable model for deciphering the mechanisms underlying cellular plasticity in vivo.