The interactions between fibroblast growth factors (FGF) and their receptors have important roles in mediating mesenchymal-epithelial cell interactions during embryogenesis. In particular, Fgf10 is predicted to function as a regulator of brain, lung and limb development on the basis of its spatiotemporal expression pattern in the developing embryo. To define the role of Fgf10, we generated Fgf10-deficient mice. Fgf10-/- mice died at birth due to the lack of lung development. Trachea was formed, but subsequent pulmonary branching morphogenesis was disrupted. In addition, mutant mice had complete truncation of the fore- and hindlimbs. In Fgf10-/- embryos, limb bud formation was initiated but outgrowth of the limb buds did not occur; however, formation of the clavicles was not affected. Analysis of the expression of marker genes in the mutant limb buds indicated that the apical ectodermal ridge (AER) and the zone of polarizing activity (ZPA) did not form. Thus, we show here that Fgf10 serves as an essential regulator of lung and limb formation.