Mammalians have a low potency for limb regeneration compared to that of amphibians. One explanation for the low potency is the deficiency of cells for regenerating amputated limbs in mammals. Amphibians can form a blastema with dedifferentiated cells, but mammals have few such cells. In this paper, we report limb formation, especially bone/cartilage formation in amputated limbs, because bone/cartilage formation is a basic step in limb pattern regeneration. After the amputation of limbs of a neonatal mouse, hypertrophy of the stump bone was observed at the amputation site, which was preceded by cell proliferation and cartilage formation. However, no new elements of bone/cartilage were formed. Thus, we grafted limb buds of mouse embryo into amputated limbs of neonatal mice. When the intact limb bud of a transgenic green fluorescent protein (GFP) mouse was grafted to the limb stump after amputation at the digit joint level, the grafted limb bud grew and differentiated into bone, cartilage and soft tissues, and it formed a segmented pattern that was constituted by bone and cartilage. The skeletal pattern was more complicated when limb buds at advanced stages were used. To examine if the grafted limb bud autonomously develops a limb or interacts with stump tissue to form a limb, the limb bud was dissociated into single cells and reaggregated before grafting. The reaggregated limb bud cells formed similar digit-like bone/cartilage structures. The reaggregated grafts also formed segmented cartilage. When the reaggregates of bone marrow mesenchymal cells were grafted into the stump, these cells formed cartilage, as do limb bud cells. Finally, to examine the potency of new bone formation in the stump tissue without exogenously supplied cells, we grafted gelatin gel containing BMP-7. BMP induced formation of several new bone elements, which was preceded by cartilage formation. The results suggest that the environmental tissues of the stump allow the formation of cartilage and bone at least partially, and that limb formation will be possible by supplying competent cells endogenously or exogenously in the future.