Unequivocal identification of the full composition of a gene is made difficult by the cryptic nature of regulatory elements. Regulatory elements are notoriously difficult to locate and may reside at considerable distances from the transcription units on which they operate and, moreover, may be incorporated into the structure of neighbouring genes. The importance of regulatory mutations as the basis of human abnormalities remains obscure. Here, we show that the chromosome 7q36 associated preaxial polydactyly, a frequently observed congenital limb malformation, results from point mutations in a Shh regulatory element. Shh, normally expressed in the ZPA posteriorly in the limb bud, is expressed in an additional ectopic site at the anterior margin in mouse models of PPD. Our investigations into the basis of the ectopic Shh expression identified the enhancer element that drives normal Shh expression in the ZPA. The regulator, designated ZRS, lies within intron 5 of the Lmbr1 gene 1 Mb from the target gene Shh. The ZRS drives the early spatio-temporal expression pattern in the limb of tetrapods. Despite the morphological differences between limbs and fins, an equivalent regulatory element is found in fish. The ZRS contains point mutations that segregate with polydactyly in four unrelated families with PPD and in the Hx mouse mutant. Thus point mutations residing in long-range regulatory elements are capable of causing congenital abnormalities, and possess the capacity to modify gene activity such that a novel gamut of abnormalities is detected.