Vertebrate limb formation has been known to be initiated by a factor(s) secreted from the lateral plate mesoderm. In this report, we provide evidence that a member of the fibroblast growth factor (FGF) family, FGF10, emanates from the prospective limb mesoderm to serve as an endogenous initiator for limb bud formation. Fgf10 expression in the prospective limb mesenchyme precedes Fgf8 expression in the nascent apical ectoderm. Ectopic application of FGF10 to the chick embryonic flank can induce Fgf8 expression in the adjacent ectoderm, resulting in the formation of an additional complete limb. Expression of Fgf10 persists in the mesenchyme of the established limb bud and appears to interact with Fgf8 in the apical ectoderm and Sonic hedgehog in the zone of polarizing activity. These results suggest that FGF10 is a key mesenchymal factor involved in the initial budding as well as the continuous outgrowth of vertebrate limbs.