The Wnt genes are members of a family of vertebrate genes related to the Drosophila gene wingless (wg). They encode secreted molecules that are thought to be important in patterning and growth control during ontogenesis. Several such genes are transcribed in localized domains during limb budding and morphogenesis. We report here a congenital limb malformation in a mouse transgenic line that ectopically expresses Wnt-1 in the developing limbs. The hemizygote phenotype, which is inherited as an autosomal dominant trait, presents extensive distal truncations of skeletal elements, skeletal fusions and interdigital webbing. The data shown here demonstrate that abnormal Wnt-1 expression is correlated with retarded mesenchymal condensations replaced by highly proliferative cells in the limb bud. This seems to lead to an inability of the affected cells to participate in normal skeletal development leading to the adult defects.