TBX3, a member of the T-box transcription factor gene family, is a transcriptional repressor that is required for the development of the heart, limbs, and mammary glands. Mutations in TBX3 that result in reduced functional protein lead to ulnar-mammary syndrome, a developmental disorder characterized by limb, mammary gland, tooth, and genital abnormalities. Increased levels of TBX3 have been shown to contribute to the oncogenic process, and TBX3 is overexpressed in several cancers, including breast cancer, liver cancer, and melanoma. Despite its important role in development and postnatal life, little is known about the signaling pathways that modulate TBX3 expression. Here we show, using in vitro and in vivo assays, that retinoic acid (RA) activates endogenous TBX3 expression, which is mediated by an RA-receptor complex directly binding and activating the TBX3 promoter, and we provide evidence that this regulation may be functionally relevant in mouse embryonic limb development. Our data identify TBX3 as a direct target of the RA signaling pathway and extend our understanding of the role and regulation of TBX3 in limb development.