We have previously described an acid phosphatase enzyme, PHO-1, present at the lumenal surface of all but the anterior six cells of the Caenorhabditis elegans intestine. In the present paper, we identify the pho-1 structural gene, which encodes a histidine acid phosphatase showing highest similarity to human prostatic acid phosphatase. The pho-1 5'-flanking DNA is capable of directing reporter gene expression that is both gut specific, correctly timed and correctly "patterned", that is, not expressed in the gut anterior. Furthermore, this anterior-posterior patterning of pho-1 expression responds to the C. elegans Wnt pathway as if pho-1 is repressed (directly or indirectly) by high levels of the HMG effector protein POP-1. Transgenic analysis of the pho-1 promoter shows that gut expression is critically dependent on a single WGATAR site. The gut-specific GATA factor ELT-2 binds to this site in vitro and removal of ELT-2 from the embryo destroys expression of the pho-1 reporter. Thus, all our results indicate that pho-1 is a direct downstream target of ELT-2. Finally, the pho-1 loss-of-function mutation shows an interesting and unexpected phenotype for a somatically-expressed hydrolytic enzyme: loss of pho-1 causes arrest of the majority of embryos but this lethality is a maternal effect. We suggest that pho-1 is required by the maternal intestine to assimilate some nutrient or cleavage product that is subsequently provided to the next generation of embryos.