Dlx-5 is a vertebrate homolog of the Drosophila Distal-less gene, one of the first genetic signals for limb formation in the fly. In the present study we have explored the possible role of Dlx-5 in limb initiation in the chick embryo. At stage 14 which is well before the initial formation of limb buds Dlx-5 is highly and specifically expressed in the ectoderm of the presumptive wing and leg forming regions of the lateral plate, but not in the intervening non-limb forming prospective flank. Thus, Dlx-5 expression distinguishes the limb-forming territories prior to limb budding, and is one of the first molecular markers of vertebrate limb initiation. Furthermore, Dlx-5 expression is induced in the non-limb-forming flank within 12 hours after implantation of an FGF2-soaked bead, a procedure that results in the induction of an ectopic limb. The rapid induction of Dlx-5 expression in response to a signal which ultimately leads to supernumerary limb formation is consistent with a role for Dlx-5 in limb initiation. We have also examined the expression of Dlx-5 in the limb buds of amelic limbless mutant chick embryos, which undergo normal limb formation but do not form an AER and thus fail to undergo further outgrowth. Dlx-5 is transiently expressed by the ectoderm of emergent limbless limb buds, consistent with a role for Dlx-5 in limb initiation. Together, our results suggest that Dlx-5 may be involved in the specification of the limb territories of the lateral plate, and in the initial formation of the limb bud from these regions. Dev Dyn 1999;216:10-15.