Individual metazoan transcription factors (TFs) regulate distinct sets of genes depending on cell type and developmental or physiological context. The precise mechanisms by which regulatory information from ligands, genomic sequence elements, co-factors, and post-translational modifications are integrated by TFs remain challenging questions. Here, we examine how a single regulatory input, sumoylation, differentially modulates the activity of a conserved C. elegans nuclear hormone receptor, NHR-25, in different cell types. Through a combination of yeast two-hybrid analysis and in vitro biochemistry we identified the single C. elegans SUMO (SMO-1) as an NHR-25 interacting protein, and showed that NHR-25 is sumoylated on at least four lysines. Some of the sumoylation acceptor sites are in common with those of the NHR-25 mammalian orthologs SF-1 and LRH-1, demonstrating that sumoylation has been strongly conserved within the NR5A family. We showed that NHR-25 bound canonical SF-1 binding sequences to regulate transcription, and that NHR-25 activity was enhanced in vivo upon loss of sumoylation. Knockdown of smo-1 mimicked NHR-25 overexpression with respect to maintenance of the 3° cell fate in vulval precursor cells (VPCs) during development. Importantly, however, overexpression of unsumoylatable alleles of NHR-25 revealed that NHR-25 sumoylation is critical for maintaining 3° cell fate. Moreover, SUMO also conferred formation of a developmental time-dependent NHR-25 concentration gradient across the VPCs. That is, accumulation of GFP-tagged NHR-25 was uniform across VPCs at the beginning of development, but as cells began dividing, a smo-1-dependent NHR-25 gradient formed with highest levels in 1° fated VPCs, intermediate levels in 2° fated VPCs, and low levels in 3° fated VPCs. We conclude that sumoylation operates at multiple levels to affect NHR-25 activity in a highly coordinated spatial and temporal manner. © 2013 Ward et al.