While cilia are present on most cells in the mammalian body, their functional importance has only recently been discovered. Cilia formation requires intraflagellar transport (IFT), and mutations disrupting the IFT process result in loss of cilia and mid-gestation lethality with developmental defects that include polyclactyly and abnormal neural tube patterning. The early lethality in IFT mutants has hindered research efforts to study the role of this organelle at later developmental stages. Thus, to investigate the role of cilia during limb development, we generated a conditional allele of the IFT protein Ift88 (polaris). Using the Cre-lox system, we disrupted cilia on different cell populations within the developing limb. While deleting cilia in regions of the limb ectoderm had no overt effect on patterning, disruption in the mesenchyme resulted in extensive polydactyly with loss of anteroposterior digit patterning and shortening of the proximodistal axis. The digit patterning abnormalities were associated with aberrant Shh pathway activity, whereas defects in limb outgrowth were due in part to disruption of lhh signaling during endochondral bone formation. In addition, the limbs of mesenchymal cilia mutants have ectopic domains of cells that resemble chondrocytes derived from the perichondrium, which is not typical of Indian hedgehog mutants. Overall these data provide evidence that IFT is essential for normal formation of the appendicular skeleton through disruption of multiple signaling pathways.