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Infective hookworm L3 encounter a host specific signal during invasion that re-activates suspended developmental pathways. Response to this cue is critical for the successful infection and completion of the life cycle in the host. In the free-living nematode Caenorhabditis elegans, recovery from the developmentally arrested dauer stage in response to environmental cues is analogous to the resumption of development in invading hookworm L3. Transforming growth factor beta (TGF-beta) and insulin-like signalling pathways mediate dauer formation and recovery. An insulin-like signalling pathway mediates L3 activation in hookworms. To determine the role of TGF-beta signalling in hookworm infection, an ortholog of the C. elegans TGF-beta signalling molecule daf-7 was cloned and characterised. Sequence from a hookworm expressed sequence tag was used to design specific primers for PCR amplification of Ac-daf-7 from Ancylostoma caninum infective L3 cDNA. Amplicons from the 5' and 3' ends were cloned, sequenced, and combined to create a full-length composite Ac-daf-7 cDNA sequence. The 1,634 nucleotide cDNA encoded a 355 amino acid open reading frame with significant homology to Ce-DAF-7 and other TGF-beta signalling molecules. The deduced amino acid sequence contained seven conserved cysteines characteristic of TGF-beta family members, as well as two additional conserved cysteines found in members of the TGF-beta/activin subfamily. Ac-DAF-7 contains a characteristic C-terminal ligand domain that is predicted to be released from a propeptide by proteolytic cleavage at a tetrabasic cleavage site. Ac-daf-7 mRNA was strongly detected by reverse transcriptase PCR in L3 and serum stimulated L3 cDNA, and weakly in cDNA from L1 and adult life cycle stages. Antiserum against Escherichia coli expressed recombinant Ac-DAF-7 detected the mature protein in L3 and adult soluble extracts, but not in excretory/secretory products from serum stimulated L3 or adults. Increased expression in arrested L3 stages suggests that Ac-daf-7 is important for developmental arrest.