Msx1 and Msx2 encode homeodomain transcription factors that play a crucial role in limb development. However, the limb phenotype of the double Msx1null/nullMsx2null/null mutant is difficult to analyze, particularly along the anteroposterior axis, because of the complex effects of the double mutation on both ectoderm- and mesoderm-derived structures. Namely, in the mutant, formation of the apical ectodermal ridge (AER) is impaired anteriorly and, consequently, the subjacent mesenchyme does not form. Using the Cre/loxP system, we investigated the respective roles of Msx genes in ectoderm and mesoderm by generating conditional mutant embryos with no Msx activity solely in the mesoderm. In these mutants, the integrity of the ectoderm-derived AER was maintained, allowing formation of the anterior mesenchyme. With this strategy, we demonstrate that mesenchymal expression of Msx1 and Msx2 is required for proper Shh and Bmp4 signaling to specify digit number and identity. Developmental Dynamics 240:1190–1202, 2011. © 2011 Wiley-Liss, Inc.