Tooth development involves reciprocal epithelial-mesenchymal interactions, polarized growth, mesenchyme condensation, and complex morphogenetic events. Because these processes bear similarities to those occurring in the developing limb, we asked whether morphogenetic signals found in the limb also occur in the developing tooth. We grafted mouse embryo tooth germs to the anterior margin of host chick embryo wing buds and determined whether the dental tissues had polarizing activity. Indeed, the grafts induced supernumerary digits. Activity of both molar and incisor tooth germs increased from bud to cap stages and was maximal at late bell stage in newborn. With further development the polarizing activity began to decrease, became undetectable in adult molar mesenchyme but persisted in incisor mesenchyme, correlating with the fact that incisors grow throughout postnatal life while molars do not. When different portions of neonatal incisors were assayed, a clear proximo-distal gradient of activity was apparent, with maximal activity restricted to the most proximal portion where undifferentiated mesenchyme and enamel organ reside. In situ hybridizations demonstrated that prior to induction of supernumerary digits, the tooth germ grafts induced expression in host tissue of Hoxd-12 and Hoxd-13. In addition, whole-mount in situ hybridizations and immunohistochemistry showed that developing tooth germs express Sonic hedgehog (Shh). Shh expression was first detected in bud stage tooth germs; at later stages Shh transcripts were prominent in enamel knot and differentiating ameloblasts at the cuspal region. We concluded that tooth germs possess polarizing activity and produce polarizing factors such as Shh. As in the limb, these factor(s) and activity probably play key roles in establishing polarity and regulating morphogenesis during early tooth development. Given its subsequent association with differentiating ameloblasts, Shh probably participates also in cytogenetic events during odontogenesis.