The apical ectodermal ridge (AER) in Neoceratodus develops after an initial period of mesenchymal proliferation and outgrowth of the fin bud and persists until chondrogenesis of the stylopod and zeugopod is initiated. At this time, the lateral margins of the AER convert to the fin fold leading to subsequent development of the dermal fin skeleton. Thorogood's (1991) fin fold model predicts that the AER should persist longer in Neoceratodus than it does in actinopterygians because of the comparatively extensive endochondral skeleton in lungfish. While the AER does persist into early chondrogenesis and is extended compared to actinopterygians (lost before fin radial chondrogenesis) it does not persist into further stages of chondrogenesis, providing partial support for Thorogood's model. Fgf8 appears in the lungfish fin epithelium during the initial period of fin outgrowth before a physical AER forms, when Fgf8 is restricted to the AER plus the preaxial and postaxial epithelium immediately adjacent to the AER. Fgf8 is no longer detected after the AER is replaced by a fin fold. Neoceratodus appears to provide a halfway point between ray fins and limbs during very early development as Thorogood proposed, but not precisely for the reasons his model suggests.