Many events in vertebrate morphogenesis and organogenesis develop from epithelial/mesenchymal interactions. These processes involve a series of sequential and reciprocal interactions between the thickened epithelial sheets and underlying mesenchymal cells. Much has been learned from in vitro assays and knockout experiments in mice on the early signaling molecules that regulate the initial stages of the epithelial/mesenchymal interactions. In this review, we discuss effectors of these initial signals, specifically the p63 and Dlx families of transcription factors, that play central roles in embryonic patterning and regulation of different developmental processes, and provide a review of some of the mutations in these genes that have been associated with ectodermal dysplasias (EDs). Birth Defects Research (Part C) 75:163–171, 2005. Published 2005 Wiley-Liss, Inc.