Here we report the isolation from a chick limb bud cDNA library of a cDNA that contains the full coding sequence of chicken Dlx-5, a member of the Distal-less (Dlx) family of homeobox-containing genes that encode homeodomains highly similar to that of the Drosophila Distal-less gene, a gene that is required for limb development in the Drosophila embryo. The expression pattern of Dlx-5 in the developing chick limb bud suggests that it may be involved in several aspects of limb morphogenesis. Dlx-5 is expressed in the apical ectodermal ridge (AER) which directs the outgrowth and patterning of underlying limb mesoderm. During early limb development Dlx-5 is also expressed in the mesoderm at the anterior margin of the limb bud and in a discrete group of mesodermal cells at the mid-proximal posterior margin that corresponds to the posterior necrotic zone. These mesodermal domains of Dlx-5 expression roughly correspond to the anterior and posterior boundaries of the progress zone, the group of highly proliferating undifferentiated mesodermal cells underneath the AER that will give rise to the skeletal elements of the limb and associated structures. The AER and anterior and posterior mesodermal domains of Dlx-5 expression are regions in which the homeobox-containing gene Msx-2 is also highly expressed, suggesting that Dlx-5 and Msx-2 might be involved in regulatory networks that control AER activity and demarcate the progress zone. In addition, Dlx-5 is expressed in high amounts by the differentiating cartilaginous skeletal elements of the limb, suggesting it may be involved in regulating the onset of limb cartilage differentiation.