Retinoic acid, when administered to pregnant mice on d 11·0 of gestation, causes limb skeletal abnormalities consisting of reduced digital number, shortening of the long bones and delayed ossification. We show here that these effects are correlated with a decrease in cell proliferation within 5 h of retinoic acid administration, specifically in the posterior half of the distal limb bud mesenchyme, from which the distal skeletal elements are generated. There is a specific downregulation of Fgf4, a gene known to be involved in limb bud outgrowth and expressed only in the posterior part of the apical ectodermal ridge; Fgf8, which is expressed throughout the apical ectodermal ridge, is unaffected. The reduction in Fgf4 expression is not accompanied by downregulation of Shh, nor of its receptor and downstream target gene Ptc, suggesting that the skeletal reduction defects induced by retinoic acid are mediated specifically by FGF4-induced skeletogenic mesenchymal cell proliferation.