The apical ectodermal ridge expresses high amounts of the homeobox gene GHox-8 when placed upon dissociated limb mesenchymal cells in culture and induces high expression of GHox-7, but only low expression of GHox-8, in the underlying mesenchymal cells. Ectoderm from the proximal anterior border of the limb induces high expression of both GHox-7 and GHox-8, while ectoderm from the proximal posterior border does not induce expression of either gene. Thus, ectoderm in various regions of the limb bud has distinct regulatory activities and may be involved in controlling the regionally specific expression of GHox-7 and GHox-8 in the mesoderm.