The Caenorhabditis elegans seam cell lineage provides a useful model to study stem cell biology and the regulation of cellular division and differentiation. Seam cells are a population of stem-like cells that run along the length of the worm which divide both symmetrically, to expand the pool of progenitor cells, and asymmetrically to generate various differentiated cells including hypodermal and neuronal cells. The seam cells also have a secretory function; giving rise to the cuticle and the alae. Seam cells do not retain their proliferative property through adult life, terminally differentiating at the end of development by undergoing homotypic fusion to produce the adult seam cells whose function is to secrete cuticle components. Thus the seam cells make an excellent model for studying the molecular basis of cell fate determination as well as more cell biological aspects of development, including the re-shaping of cells during differentiation, the polarity of cell fate allocation and cellular trafficking processes accompanying secretion. In this thesis, I investigated the role of the small GTPase, arf-3, an ADPribosylation factor (ARF), in C. elegans seam cell development. I found that arf-3 knockout or overexpression causes severe developmental defects including embryonic lethality and seam cell defects. Furthermore, knockdown of arf-3 in a RNAi hypersensitive mutant causes defects in moulting and seam cell divisions. In a screen for genes interacting with arf-3 I identified agef-1 and dyn-1. I also show that their interaction with arf-3 is linked to moulting. arf-3 expression in the seam is driven by a 3' intronic enhancer element that also drives the expression of the "Seam Cell Marker", scm::gfp, a transcriptional reporter which is used as a marker of seam cell fate. I identified two transcription factors, elt-1 and nhr-23 that bind the 3' enhancer to regulate arf-3 expression in the seam cells. ARF-3::mCherry localises with the golgi, early and late endosomes in the seam cells in concert with the moulting cycle. This, and the moulting defects observed in arf-3 knockdown suggests a role in regulating cuticle synthesis and moulting. In summary, arf-3 function is crucial to ensure proper development of the C. elegans seam cells and the regulation of moulting.