A major gap in our knowledge of development is how the growth and identity of tissues and organs are linked during embryogenesis. The vertebrate limb is one of the best models to study these processes. Combining mutant analyses with gain- and loss-of-function approaches in zebrafish and chick embryos, we show that Tbx5, in addition to its role governing forelimb identity, is both necessary and sufficient for limb outgrowth. We find that Tbx5 functions downstream of WNT signaling to regulate Fgf10, which, in turn, maintains Tbx5 expression during limb outgrowth. Furthermore, our results indicate that Tbx5 and Wnt2b function together to initiate and specify forelimb outgrowth and identity. The molecular interactions governed by members of the T-box, Wnt and Fgf gene families uncovered in this study provide a framework for understanding not only limb development, but how outgrowth and identity of other tissues and organs of the embryo may be regulated.