The secreted protein encoded by the Sonic hedgehog (Shh) gene is localized to the posterior margin of vertebrate limb buds and is thought to be a key signal in establishing anterior-posterior limb polarity. In the Shh(-/-) mutant mouse, the development of many embryonic structures, including the limb, is severely compromised. In this study, we report the analysis of Shh(-/-) mutant limbs in detail. Each mutant embryo has four limbs with recognizable humerus/femur bones that have anterior-posterior polarity. Distal to the elbow/knee joints, skeletal elements representing the zeugopod form but lack identifiable anterior-posterior polarity. Therefore, Shh specifically becomes necessary for normal limb development at or just distal to the stylopod/zeugopod junction (elbow/knee joints) during mouse limb development. The forelimb autopod is represented by a single distal cartilage element, while the hindlimb autopod is invariably composed of a single digit with well-formed interphalangeal joints and a dorsal nail bed at the terminal phalanx. Analysis of GDF5 and Hoxd11-13 expression in the hindlimb autopod suggests that the forming digit has a digit-one identity. This finding is corroborated by the formation of only two phalangeal elements which are unique to digit one on the foot. The apical ectodermal ridge (AER) is induced in the Shh(-/-) mutant buds with relatively normal morphology. We report that the architecture of the Shh(-/-) AER is gradually disrupted over developmental time in parallel with a reduction of Fgf8 expression in the ridge. Concomitantly, abnormal cell death in the Shh(-/-) limb bud occurs in the anterior mesenchyme of both fore- and hindlimb. It is notable that the AER changes and mesodermal cell death occur earlier in the Shh(-/-) forelimb than the hindlimb bud. This provides an explanation for the hindlimb-specific competence to form autopodial structures in the mutant. Finally, unlike the wild-type mouse limb bud, the Shh(-/-) mutant posterior limb bud mesoderm does not cause digit duplications when grafted to the anterior border of chick limb buds, and therefore lacks polarizing activity. We propose that a prepattern exists in the limb field for the three axes of the emerging limb bud as well as specific limb skeletal elements. According to this model, the limb bud signaling centers, including the zone of polarizing activity (ZPA) acting through Shh, are required to elaborate upon the axial information provided by the native limb field prepattern.