The Wnt gene family in vertebrates comprises at least 11 distinct genes but the only family member previously identified in Drosophila has been the segment polarity gene wingless (wg), the ortholog of vertebrate Wnt-1. In this report we describe the isolation of a novel Drosophila Wnt gene, Dwnt-5, which differs significantly from wg in both the pattern of its expression during embryogenesis and the predicted structure of its product. Dwnt-5 encodes a polypeptide of 112 kDa, which is more than twice as large as the products of previously known Wnt genes. The protein shares homology with other Wnt sequences in its carboxy-terminal half only and is most closely related to the products of vertebrate Wnt-5a and Wnt-5b. Dwnt-5 is expressed in a complex pattern during Drosophila embryogenesis. At the extended germ band stage, however, transcripts accumulate specifically in the nascent limb primordia of the head and thoracic segments. We show that this elevated expression depends on the activity of the homeobox gene Distal-less (Dll) and suggest that the Dwnt-5 gene may constitute a downstream target of Dll that acts in the specification of these primordia.