The mouse mutants of the hemimelia-luxate group (lx, lu, lst, Dh, Xt, and the more recently identified Hx, Xpl and Rim4;     ) have in common preaxial polydactyly and longbone abnormalities. Associated with the duplication of digits are changes in the regulation of development of the anterior limb bud resulting in ectopic expression of signalling components such as Sonic hedgehog (Shh) and fibroblast growth factor-4 (Fgf4), but little is known about the molecular causes of this misregulation. We generated, by a transgene insertion event, a new member of this group of mutants, Sasquatch (Ssq), which disrupted aspects of both anteroposterior (AP) and dorsoventral (DV) patterning. The mutant displayed preaxial polydactyly in the hindlimbs of heterozygous embryos, and in both hindlimbs and forelimbs of homozygotes. The Shh, Fgf4, Fgf8, Hoxd12 and Hoxd13 genes were all ectopically expressed in the anterior region of affected limb buds. The insertion site was found to lie close to the Shh locus. Furthermore, expression from the transgene reporter has come under the control of a regulatory element that directs a pattern mirroring the endogenous expression pattern of Shh in limbs. In abnormal limbs, both Shh and the reporter were ectopically induced in the anterior region, whereas in normal limbs the reporter and Shh were restricted to the zone of polarising activity (ZPA). These data strongly suggest that Ssq is caused by direct interference with the cis regulation of the Shh gene.