Exposure of murine embryos to teratogenic doses of retinoic acid (RA) induced homeotic transformations of vertebrae. Posterior transformations occurred along the complete body axis after RA administration on day 7 of gestation and were accompanied by anterior shifts of Hox gene expression domains in embryos. Anterior transformations of vertebrae in the caudal half of the vertebral column were induced on day 8.5. We suggest that the identity of a vertebral segment is specified by a combination of functionally active Hox genes, a "Hox code." In this concept the sequential activation of Hox genes defines sequentially more posterior axial levels, while mesodermal cells leave the primitive streak. Exogenous RA interferes with the normal establishment of Hox codes and thus with axial specification.