Most current models propose Sonic hedgehog (Shh) as the primary determinant of anteroposterior development of amniote limbs. Shh protein is said to be required to direct the formation of skeletal elements and to specify digit identity through dose-dependent activation of target gene expression. However, the identity of genes targeted by Shh, and the regulatory mechanisms controlling their expression, remain poorly understood. Gli3 (the gene implicated in human Greig cephalopolysyndactyly syndrome) is proposed to negatively regulate Shh by restricting its expression and influence to the posterior mesoderm. Here we report genetic analyses in mice showing that Shh and Gli3 are dispensable for formation of limb skeletal elements: Shh(-/-) Gli3(-/-) limbs are distally complete and polydactylous, but completely lack wild-type digit identities. We show that the effects of Shh signalling on skeletal patterning and ridge maintenance are necessarily mediated through Gli3. We propose that the function of Shh and Gli3 in limb skeletal patterning is limited to refining autopodial morphology, imposing pentadactyl constraint on the limb's polydactyl potential, and organizing digit identity specification, by regulating the relative balance of Gli3 transcriptional activator and repressor activities.