The prevalence of clinical phenotypes that exhibit combinations of central polydactyly, syndactyly, or cleft hand or foot is higher than would be expected for random independent mutations. We have previously demonstrated that maternal ingestion of a chemotherapeutic agent, busulfan, at embryonic day 11 (E11) induces these defects in various combinations in rat embryo limbs. In an effort to determine the mechanism by which busulfan disrupts digital development, we examined cell death by Nile Blue staining and TdT-mediated dUTP nick end labeling (TUNEL) assays; we also carried out whole mount in situ hybridization for fibroblast growth factor-8 (Fgf8), bone morphogenetic protein-4 (Bmp4), and sonic hedgehog (Shh) to examine developmental pathways linked to these defects. In busulfan-treated embryos, diffuse cell death was evident in both ectoderm and mesoderm, peaking at E13. The increased cell death leads to regression of Fgf8 in the apical ectodermal ridge (AER) and Bmp4 and Shh in the underlying mesoderm. The subsequent pattern of interdigital apoptosis and cartilage condensation was variably disrupted. These results suggest that busulfan manifests its teratogenic effects by inducing cell death of both ectoderm and mesoderm, with an associated reduction in tissue and a disruption in the generation of patterning molecules during critical periods of digit specification.