To gain insight into the role of the limb deformity (ld) gene in limb morphogenesis, we examined the morphologic details of early embryonic limb formation in the mutant ld/ld mouse. Initial morphological differences between wild-type and homozygous ld embryos are apparent during early gestational day 10, a time period during which anteroposterior limb morphogenesis occurs. As a result of a shortened anteroposterior axis, the mutant limb bud appears more pointed than its wild-type counterpart. In addition, the apical ectodermal ridge (AER), a structure crucial to both proximodistal and anteroposterior limb development, fails to differentiate properly in mutant ld embryos. Consistent with these observations, molecular analysis of the limb promordia shows that the limb ectoderm contains a level of ld transcripts fivefold higher relative to its mesenchyme. Furthermore, expression of ld transcripts in other parts of the developing embryo and in primitive streak embryos (gestational day 7) suggests possible roles for this gene in the earliest determinative events of morphogenesis. These data lead us to conclude that ld gene products are required for both proper AER differentiation and anteroposterior pattern formation in limb mesenchyme.