Local application of all-trans-retinoic acid (RA) to the anterior margin of chick limb buds results in pattern duplications reminescent of those that develop after grafting cells from the zone of polarizing activity (ZPA). RA may act directly by conferring positional information to limb bud cells, or it may act indirectly by creating a polarizing region in the tissue distal to the RA source. Here we demonstrate that tissue distal to an RA-releasing bead acquires polarizing activity in a dose-dependent manner. Treatments with pharmacological (beads soaked in 330 micrograms/ml) and physiological (beads soaked in 10 micrograms/ml) doses of RA are equally capable of inducing digit pattern duplication. Additionally, both treatments induce sonic hedgehog (shh; also known as vertebrate hedgehog-1, vhh-1), a putative ZPA morphogen and Hoxd-11, a gene induced by the polarizing signal. However, tissue transplantation assays reveal that pharmacological, but not physiological, doses create a polarizing region. This differential response could be explained if physiological doses induced less shh than pharmacological doses. However, our in situ hybridization analyses demonstrate that both treatments result in similar amounts of mRNA encoding this candidate ZPA morphogen. We outline a model describing the apparently disparate effects of pharmacologic and physiological doses RA on limb bud tissue.