Despite its relative anatomic simplicity, the nematode Caenorhabditis elegans (C. elegans) is a complex multicellular organism. In this review, we describe studies that have contributed to a better understanding of certain aspects of the worm's physiology. We focus on the cellular and molecular basis of the interaction between C. elegans and its environment, including its sensory capacities, the intrinsic biological clock that governs the speed of its life, and on some of the factors that control its life span. We also outline very recent findings that have demonstrated the existence of an innate immune system in C. elegans. Finally, we highlight a number of novel techniques that are transforming the worm from a largely genetic model system into an attractive organism for functional genomic studies.