We study higher-dimensional non-supersymmetric orbifold models where the Higgs field is identified with some internal component of a gauge field. We address two important and related issues that constitute severe obstacles towards model building within this type of constructions: the possibilities of achieving satisfactory Yukawa couplings and Higgs potentials. We consider models where matter fermions are localized at the orbifold fixed-points and couple to additional heavy fermions in the bulk. When integrated out, the latter induce tree-level non-local Yukawa interactions and a quantum contribution to the Higgs potential that we explicitly evaluate and analyse. The general features of these highly constrained models are illustrated through a minimal but potentially realistic five-dimensional example. Finally, we discuss possible cures for the persisting difficulties in achieving acceptable top and Higgs masses. In particular, we consider in some detail the effects induced in these models by adding localized kinetic terms for gauge fields. (C) 2003 Elsevier B.V. All rights reserved.