Ectodermal dysplasia syndromes affect the development of several organs, including hair, teeth, and glands. The recent cloning of two genes responsible for these syndromes has led to the identification of a novel TNF family ligand, ectodysplasin, and TNF receptor, edar. This has indicated a developmental regulatory role for TNFs for the first time. Our in situ hybridization analysis of the expression of ectodysplasin (encoded by the Tabby gene) and edar (encoded by the downless gene) during mouse tooth morphogenesis showed that they are expressed in complementary patterns exclusively in ectodermal tissue layer. Edar was expressed reiteratively in signaling centers regulating key steps in morphogenesis. The analysis of the effects of eight signaling molecules in the TGFbeta, FGF, Hh, Wnt, and EGF families in tooth explant cultures revealed that the expression of edar was induced by activinbetaA, whereas Wnt6 induced ectodysplasin expression. Moreover, ectodysplasin expression was downregulated in branchial arch epithelium and in tooth germs of Lef1 mutant mice, suggesting that signaling by ectodysplasin is regulated by LEF-1-mediated Wnt signals. The analysis of the signaling centers in tooth germs of Tabby mice (ectodysplasin null mutants) indicated that in the absence of ectodysplasin the signaling centers were small. However, no downstream targets of ectodysplasin signaling were identified among several genes expressed in the signaling centers. We conclude that ectodysplasin functions as a planar signal between ectodermal compartments and regulates the function, but not the induction, of epithelial signaling centers. This TNF signaling is tightly associated with epithelial-mesenchymal interactions and with other signaling pathways regulating organogenesis. We suggest that activin signaling from mesenchyme induces the expression of the TNF receptor edar in the epithelial signaling centers, thus making them responsive to Wnt-induced ectodysplasin from the nearby ectoderm. This is the first demonstration of integration of the Wnt, activin, and TNF signaling pathways.