Various morphological and biochemical parameters were used to study the mode of interference by cytosine arabinoside (Ara-C) in critical phases of embryonic limb development. Inhibition of embryonic DNA synthesis occurred immediately after injection of Ara-C into the mother. The inhibition was dose-dependent and was substantial even after the nonteratogenic dose (2 mg/kg) of Arc-C. The pattern of limb bone deficiencies in Ara-C treated fetuses was specific for each developmental stage at which the treatment was given; the site of affect moved distalwards along the limb as the development advanced. The teratogenic dose was cytotoxic to mesenchymal cells with a high proliferation rate but did not affect others such as the future cartilage cells in which the rate of proliferation was lower. The existence of this differential susceptibility at each stage of development, together with information about the pattern of bone defects at the same stage, permitted us not only to define with some precision the cellular basis of origin of limb defects but also to infer the relative level of cell differentiation pertaining to each successive stage. Deoxycytidine, if injected simultaneously with and at doses eight times larger than Ara-C, afforded virtually complete protection against teratogenic effects. Deoxycytidine also prevented cell death in the limbs of Ara-C treated embryos. However, a dramatic increase in the frequency of polydactyly was found in the protected fetuses. The fact that the frequency of ectrodactyly in the protected fetuses decreased in inverse proportion to the frequency of polydactyly strengthened the notion that there may be a common cellular basis underlying these two types of digital defects. Striking changes were found in the structure of AER at 24 hours after Ara-C treatment; it was abnormally thickened into a gland-like structure and its inner edge facing the mesenchyme thickened into a gland-like structure and its inner edge facing the mesenchyme was thrown into several folds. This may constitute a response to impairment in the underlying mesenchyme with which AFR has long been considered to have an interdependent relationship.