Sonic hedgehog (Shh) signaling in the limb plays a central role in coordination of limb patterning and outgrowth. Shh expression in the limb is limited to the cells of the zone of polarizing activity (ZPA), located in posterior limb bud mesoderm. Shh is not expressed by limb ectoderm or apical ectodermal ridge (AER), but recent studies suggest a role for AER–Shh signaling in limb patterning. Here, we have examined the effects of activation of Shh signaling in the AER. We find that targeted expression of Shh in the AER activates constitutive Shh signaling throughout the AER and subjacent limb mesoderm, and causes a range of limb patterning defects with progressive severity from mild polydactyly, to polysyndactyly with proximal defects, to severe oligodactyly with phocomelia and partial limb ventralization. Our studies emphasize the importance of control of the timing, level and location of Shh pathway signaling for limb anterior–posterior, proximal–distal, and dorsal–ventral patterning. Developmental Dynamics 240:1289–1302, 2011. © 2011 Wiley-Liss, Inc.