Msx genes are transcription factors that are expressed during embryogenesis of developing appendages in regions of epithelial-mesenchymal interactions. Various lines of evidence indicate that these genes function to maintain embryonic tissues in an undifferentiated, proliferative state. We have identified the axolotl homolog of Msx-2, and investigated its expression during limb development, limb regeneration, and wound healing. As in limb buds of higher vertebrates, axolotl Msx-2 is expressed in the apical epidermis and mesenchyme; however, its expression domain is more extensive, reflecting the broader region of the apical epidermal cap in amphibians. Msx-2 expression is downregulated at late stages of limb development, but is reexpressed within one hour after limb amputation. Msx-2 is also reexpressed during wound healing, and may be essential in the early stages of initiation of the limb regeneration cascade.