Comparative genomic sequence analysis has found that the genes for many chromatin-associated proteins are poorly conserved, but the biological consequences of these sequence changes are not understood. Here, we show that four genes identified for an Inappropriate Vulval cell Proliferation (ivp) phenotype in the nematode Caenorhabditis briggsae exhibit distinct functions and genetic interactions when compared with their orthologs in C. elegans. Specifically, we show that the four C. briggsae ivp genes encode the noncanonical histone HTZ-1/H2A.z and three nematode-specific proteins predicted to function in the nucleus. The mutants exhibit ectopic vulval precursor cell proliferation (the multivulva [Muv] phenotype) due to inappropriate expression of the lin-3/EGF gene, and RNAseq analysis suggests a broad role for these ivp genes in transcriptional repression. Importantly, although the C. briggsae phenotypes have parallels with those seen in the C. elegans synMuv system, except for the highly conserved HTZ-1/H2A.z, comparable mutations in C. elegans ivp orthologs do not exhibit synMuv gene interactions or phenotypes. These results demonstrate the evolutionary changes that can underlie conserved biological outputs and argue that proteins critical to repress inappropriate expression from the genome participate in a rapidly evolving functional landscape.