Avian forelimb digit homology remains one of the standard themes in comparative biology and EvoDevo research. In order to resolve the apparent contradictions between embryological and paleontological evidence a variety of hypotheses have been presented in recent years. The proposals range from excluding birds from the dinosaur clade, to assignments of homology by different criteria, or even assuming a hexadactyl tetrapod limb ground state. At present two approaches prevail: the frame shift hypothesis and the pyramid reduction hypothesis. While the former postulates a homeotic shift of digit identities, the latter argues for a gradual bilateral reduction of phalanges and digits. Here we present a new model that integrates elements from both hypotheses with the existing experimental and fossil evidence. We start from the main feature common to both earlier concepts, the initiating ontogenetic event: reduction and loss of the anterior-most digit. It is proposed that a concerted mechanism of molecular regulation and developmental mechanics is capable of shifting the boundaries of hoxD expression in embryonic forelimb buds as well as changing the digit phenotypes. Based on a distinction between positional (topological) and compositional (phenotypic) homology criteria, we argue that the identity of the avian digits is II, III, IV, despite a partially altered phenotype. Finally, we introduce an alternative digit reduction scheme that reconciles the current fossil evidence with the presented molecular-morphogenetic model. Our approach identifies specific experiments that allow to test whether gene expression can be shifted and digit phenotypes can be altered by induced digit loss or digit gain. J. Exp. Zool. (Mol. Dev. Evol.) 322B: 1–12, 2014. © 2013 Wiley Periodicals, Inc.