Neuronal identities are specified by the combinatorial functions of activators and repressors of gene expression. Members of the well-conserved Olf/EBF (O/E) transcription factor family have been shown to play important roles in neuronal and non-neuronal development and differentiation. O/E proteins are highly expressed in the olfactory epithelium, and O/E binding sites have been identified upstream of olfactory genes. However, the roles of O/E proteins in sensory neuron development are unclear. Here we show that the O/E protein UNC-3 is required for subtype specification of the ASI chemosensory neurons in Caenorhabditis elegans. UNC-3 promotes an ASI identity by directly repressing the expression of alternate neuronal programs and by activating expression of ASI-specific genes including the daf-7 TGF-beta gene. Our results indicate that UNC-3 is a critical component of the transcription factor code that integrates cell-intrinsic developmental programs with external signals to specify sensory neuronal identity and suggest models for O/E protein functions in other systems.