Retinoic acid may be the natural morphogen used to generate digit pattern in the chick limb bud. It has been proposed that retinoic acid acts by binding to a cellular retinoic acid-binding protein (CRABP) and then entering the nucleus to alter the pattern of gene activity. High-affinity receptors that bind both retinoic acid and DNA and are analogous to the steroid receptors have been identified. But the concentration of endogenous retinoic acid in the limb and the binding coefficient of the nuclear receptors indicate that they are saturated throughout the limb. Here we investigate the CRABP distribution in the developing chick limb bud. We find CRABP in the area of intense morphogenetic activity at the tip, with a differential distribution across the anteroposterior axis, the high point being at the anterior margin. Retinoic acid also forms a concentration gradient across the limb bud, but is highest on the posterior side. We propose that CRABP could be reducing the effective concentration of retinoic acid reaching the nucleus to a level appropriate for the differential regulation of gene transcription, providing a spatially modulated morphogenetic gradient of information for digit formation.