Many differentiated cells can be reprogrammed to adopt new identities; reprogramming can occur through an embryonic stem cell-like state or by direct conversion to another cell type (transdifferentiation). The latter route is poorly understood but, here, Sophie Jarriault and colleagues provide detailed analyses of a natural direct reprogramming event – the in vivo transdifferentiation of a C. elegans rectal cell into a motoneuron (see p. 1483). The researchers show that when the rectal cell undergoes transdifferentiation, it adopts a temporary state that lacks the characteristics of both the initial and final cellular identities before undergoing stepwise redifferentiation into a motoneuron. Dedifferentiation, they report, can occur without cell division, and redifferentiation requires the conserved transcription factor UNC-3. Importantly, the intermediate dedifferentiated stage has restricted plasticity. Together, these results suggest that direct in vivo reprogramming in C. elegans (and possibly other species) involves transition through discrete stages and that tight control mechanisms restrict cell potential at each stage, a conclusion with important implications for regenerative medicine.