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Animals can adapt to dynamic environmental conditions by modulating their developmental programs. Understanding the genetic architecture and molecular mechanisms underlying developmental plasticity in response to changing environments is an important and emerging area of research. Here, we show a novel role of cAMP response element binding protein (CREB)-encoding crh-1 gene in developmental polyphenism of C . elegans . Under conditions that promote normal development in wild-type animals, crh-1 mutants inappropriately form transient pre-dauer (L2d) larvae and express the L2d marker gene. L2d formation in crh-1 mutants is specifically induced by the ascaroside pheromone ascr#5 (asc-ωC3; C3), and crh-1 functions autonomously in the ascr#5-sensing ASI neurons to inhibit L2d formation. Moreover, we find that CRH-1 directly binds upstream of the daf-7 TGF-β locus and promotes its expression in the ASI neurons. Taken together, these results provide new insight into how animals alter their developmental programs in response to environmental changes.