The enormous diversity of cell types that characterizes any animal nervous system is defined by neuron-type-specific gene batteries that endow cells with distinct anatomical and functional properties. To understand how such cellular diversity is genetically specified, one needs to understand the gene regulatory programmes that control the expression of cell-type-specific gene batteries. The small nervous system of the nematode Caenorhabditis elegans has been comprehensively mapped at the cellular and molecular levels, which has enabled extensive, nervous system-wide explorations into whether there are common underlying mechanisms that specify neuronal cell-type diversity. One principle that emerged from these studies is that transcription factors termed ‘terminal selectors’ coordinate the expression of individual members of neuron-type-specific gene batteries, thereby assigning unique identities to individual neuron types. Systematic mutant analyses and recent nervous system-wide expression analyses have revealed that one transcription factor family, the homeobox gene family, is broadly used throughout the entire C. elegans nervous system to specify neuronal identity as terminal selectors. I propose that the preponderance of homeobox genes in neuronal identity control is a reflection of an evolutionary trajectory in which an ancestral neuron type was specified by one or more ancestral homeobox genes, and that this functional linkage then duplicated and diversified to generate distinct cell types in an evolving nervous system.