The formation of the apical ectodermal ridge (AER) is critical for the distal outgrowth and patterning of the vertebrate limb. Recent work in the chick has demonstrated that interplay between theWntandFgfsignaling pathways is essential in the limb mesenchyme and ectoderm in the establishment and perhaps the maintenance of the AER. In the mouse, whereas a role forFgfsfor AER establishment and function has been clearly demonstrated, the role ofWnt/β-cateninsignaling, although known to be important, is obscure. In this study, we demonstrate thatWnt3, which is expressed ubiquitously throughout the limb ectoderm, is essential for normal limb development and plays a critical role in the establishment of the AER. We also show that the conditional removal ofβ-cateninin the ventral ectodermal cells is sufficient to elicit the mutant limb phenotype. In addition, removingβ-cateninafter the induction of the ridge results in the disappearance of the AER, demonstrating the requirement for continuedβ-cateninsignaling for the maintenance of this structure. Finally, we demonstrate thatWnt/β-cateninsignaling lies upstream of theBmpsignaling pathway in establishment of the AER and regulation of the dorsoventral polarity of the limb.