The embryonic vertebrate limb serves as an excellent experimental model system in which to study mechanisms that regulate morphogenesis of the skeleton. The appendicular skeleton arises through the process of endochondral ossification, whereby a cartilage template is initially formed and subsequently replaced by bone. One molecule that has a dramatic effect on these processes is the vitamin-A metabolite, retinoic acid (RA). RA functions through a class of nuclear hormone receptors, the retinoic acid receptors (RARs) and retinoid-X-receptors (RXRs), to regulate gene transcription. Experimental evidence from RA teratogenesis suggests that the presence of ligand-activated RARs and/or inappropriate expression of RARs inhibits chondrogenesis. Conversely, genetic analysis has shown that the absence of the receptors can lead to deficiencies in cartilage formation while also promoting chondrogenesis at ectopic sites. Taken together, these studies suggest that the RARs play a fundamental role in the early stages of skeletal development, specifically those involved in the formation of prechondrogenic condensations and their subsequent differentiation into chondroblasts.