Axolotls, with their extensive ability to regenerate as adults, provide a useful model for studying the mechanisms of regeneration in a vertebrate, in hopes of understanding why other vertebrates cannot regenerate. Although the expression of many genes has been described in regeneration, techniques for gain and loss of function analyses have been limited. We demonstrated in a previous study that gain of function for secreted proteins was possible in the axolotl using the vaccinia virus to drive expression of the transgene. In this study, we used a pharmacological approach made possible by the existence of a naturally occurring compound that specifically blocks shh signaling, cyclopamine. The treatment of axolotls with cyclopamine during the process of limb regeneration caused a loss of digits similar to that described for the shh knockout mouse. Our results further demonstrate that shh signaling and function are conserved during limb regeneration in urodeles as in limb development in other vertebrates. © 2002 Wiley-Liss, Inc.