Msx-2 is a homeodomain-containing transcription factor expressed in the apical ectodermal ridge (AER) and the mesoderm at the anterior and posterior boundaries of the progress zone of the developing limb. Separate regulatory elements in the Msx-2 gene have been postulated to achieve specific spatial domains. Analysis of an 11.5kb chicken Msx-2 clone in transgenic mice has lead to the identification of a 348bp HpaII fragment 5\sp\prime of the Msx-2 promoter which is capable of driving AER expression. In the present work we have identified an additional 380bp BglII-HpaII fragment 5\sp\prime of the previously identified 348bp region which is capable of driving consistent reporter expression in the AER of the forelimbs.^ Since elements in the 11.5kb genomic clone did not drive expression in the limb mesoderm of transgenic mice, regions extending further 5\sp\prime and 3\sp\prime of the original clone were isolated. LacZ reporter constructs with chicken Msx-2 genomic sequences were generated and tested in transgenic mice to identify regulatory regions important for specific spatial domains. Four constructs gave mesodermal expression at very low frequency. The low frequency of mesodermal expression may result from the presence of incomplete regulatory elements.^ Shh is a signalling molecule which is normally restricted to the polarizing zone of the limb, interacts with the AER and is thought to play a major role in anterior-posterior patterning. The Shh expression pattern was altered by the use of the AER specific enhancer of the Msx-2 gene to direct ectopic expression of chicken Shh to the AERs of the limbs of transgenic mice. Ectopic expression of Shh results in the formation of limbs with deformities. Limb defects vary and include preaxial polydactyly, syndactyly, and oligodactyly. In the most severe cases the zeugopod and stylopod are also shortened and deformed. Hindlimb defects tend to be more severe than the forelimb defects, and preaxial hemimelia in the hindlimb is often observed. The expression patterns of several genes which are believed to be important in limb development and which interact with Shh were analyzed in the mutant limbs. Altered expression patterns for Msx-2, Fgf4, patched and Hoxd11 were observed in the mutant limbs.