Polarized expression of the Sonic hedgehog (Shh) gene in the posterior mesenchyme is essential for pattern formation in the appendages of higher vertebrates, from teleost fins to tetrapod limb buds. We report on a sequence in intron 5 of the Lmbr1 gene, which resides approximately 1 Mb from the Shh coding region in the mouse genome and is highly conserved among teleost fishes and throughout the tetrapod lineage. Positional cloning revealed that two mouse mutations, Hx and M100081, characterized by mirror-image digit duplication and ectopic anterior Shh expression, have base substitutions in this sequence. Absence of the conserved sequence in limbless reptiles and amphibians and a cis-trans test using the Hx and Shh KO alleles suggest that the sequence is a cis-acting regulator that controls the polarized expression of Shh.