Preaxial polydactyly (PPD) is a common limb-associated birth defect characterized by extra digit(s) in the anterior autopod. It often results from ectopic sonic hedgehog (Shh) expression in the anterior limb bud. Although several transcription factors are known to restrict Shh expression to the posterior limb bud, how they function together remains unclear. Here we provide evidence from mouse conditional knockout limb buds that the bHLH family transcription factor gene Twist1 is required to inhibit Shh expression in the anterior limb bud mesenchyme. More importantly, we uncovered genetic synergism between Twist1 and the ETS family transcription factor genes Etv4 and Etv5 (collectively Etv), which also inhibit Shh expression. Biochemical data suggest that this genetic interaction is a result of direct association between TWIST1 and ETV proteins. Previous studies have shown that TWIST1 functions by forming homodimers or heterodimers with other bHLH factors including HAND2, a key positive regulator of Shh expression. We found that the PPD phenotype observed in Etv mutants is suppressed by a mutation in Hand2, indicative of genetic antagonism. Furthermore, overexpression of ETV proteins influences the dimerization of these bHLH factors. Together, our data suggest that through biochemical interactions, the Shh expression regulators ETV, TWIST1 and HAND2 attain a precise balance to establish anterior-posterior patterning of the limb.