We have analyzed a new limb mutant in the chicken that we nameoligozeugodactyly (ozd). The limbs of this mutant have a longitudinal postaxial defect, lacking the posterior element in the zeugopod(ulna/fibula) and all digits except digit 1 in the leg. Classical recombination experiments show that the limb mesoderm is the defective tissue layer in ozd limb buds. Molecular analysis revealed that theozd limbs develop in the absence of Shh expression, while all other organs express Shh and develop normally. NeitherPtc1 nor Gli1 are detectable in mutant limb buds. However,Bmp2 and dHAND are expressed in the posterior wing and leg bud mesoderm, although at lower levels than in normal embryos. Activation ofHoxd11-13 occurs normally in ozd limbs but progressively declines with time. Phase III of expression is more affected than phase II,and expression is more severely affected in the more 5′ genes. Interestingly, re-expression of Hoxd13 occurs at late stages in the distal mesoderm of ozd leg buds, correlating with formation of digit 1. Fgf8 and Fgf4 expression are initiated normally in the mutant AER but their expression is progressively downregulated in the anterior AER. Recombinant Shh protein or ZPA grafts restore normal pattern toozd limbs; however, retinoic acid fails to induce Shh in ozdlimb mesoderm. We conclude that Shh function is required for limb development distal to the elbow/knee joints, similar to the Shh^-/-mouse. Accordingly we classify the limb skeletal elements as Shh dependent or independent, with the ulna/fibula and digits other than digit 1 in the leg being Shh dependent. Finally we propose that the ozd mutation is most likely a defect in a regulatory element that controls limb-specific expression of Shh.