We present direct evidence of an activator-inhibitor system in the generation of the regularly spaced transverse ridges of the palate. We show that new ridges, called rugae, that are marked by stripes of expression of Shh (encoding Sonic hedgehog), appear at two growth zones where the space between previously laid rugae increases. However, inter-rugal growth is not absolutely required: new stripes of Shh expression still appeared when growth was inhibited. Furthermore, when a ruga was excised, new Shh expression appeared not at the cut edge but as bifurcating stripes branching from the neighboring stripe of Shh expression, diagnostic of a Turing-type reaction-diffusion mechanism. Genetic and inhibitor experiments identified fibroblast growth factor (FGF) and Shh as components of an activator-inhibitor pair in this system. These findings demonstrate a reaction-diffusion mechanism that is likely to be widely relevant in vertebrate development.