Tabby is a mouse mutant characterized by deficient development of the ectodermal organs: teeth, hair, and a subset of glands. Ectodysplasin, the protein encoded by the Tabby gene, was recently identified as a novel TNF-like transmembrane protein but little is known about its function. We have examined the Tabby tooth phenotype in detail by analysis of the adult and embryonic teeth. Tabby first molars had an obvious defect in cusp patterning as the number of cusps was reduced and the buccal and lingual cusps were joined. The disturbance in development was first visible morphologically in the bud stage molar. The primary enamel knot in a cap stage Tabby tooth expressed all enamel knot markers analyzed but was smaller than wild type and the first pair of developing secondary enamel knots was fused. We propose that the Tabby tooth phenotype is due to growth retardation during early stages of development which leads to reduced signaling from the primary enamel knot, followed by deficient growth of the dental epithelium and lack of formation of the last developing secondary enamel knots. The ectodysplasin transcripts were expressed in the outer enamel epithelium and dental lamina. When cultured in vitro Tabby bud/cap stage molars formed fewer cusps than wild-type controls. This phenotype was not rescued by exogenously added EGF despite the previously proposed link between Tabby and EGF. Instead FGF-10 partially restored morphogenesis and stimulated the development of additional tooth cusps in cultured Tabby molars.