Two broad classes of models have been proposed to explain the patterning of the proximal-distal axis of the vertebrate limb (from the shoulder to the digit tips). Differentiating between them, we demonstrate that early limb mesenchyme in the chick is initially maintained in a state capable of generating all limb segments through exposure to a combination of proximal and distal signals. As the limb bud grows, the proximal limb is established through continued exposure to flank-derived signal(s), whereas the developmental program determining the medial and distal segments is initiated in domains that grow beyond proximal influence. In addition, the system we have developed, combining in vitro and in vivo culture, opens the door to a new level of analysis of patterning mechanisms in the limb.