The vitamin A metabolite retinoic acid (RA) provides patterning information during vertebrate embryogenesis, but the mechanism through which RA influences limb development is unclear. During patterning of the limb proximodistal axis (upper limb to digits), avian studies suggest that a proximal RA signal generated in the trunk antagonizes a distal fibroblast growth factor (FGF) signal. However, mouse and zebrafish genetic studies suggest that loss of RA suppresses forelimb initiation. Here, using genetic and pharmacological approaches, we demonstrate that limb proximodistal patterning is not RA dependent, thus indicating that RA-FGF antagonism does not occur along the proximodistal axis of the limb. Instead, our studies show that RA-FGF antagonism acts prior to limb budding along the anteroposterior axis of the trunk lateral plate mesoderm to provide a patterning cue that guides formation of the forelimb field. These findings reconcile disparate ideas regarding RA-FGF antagonism and provide insight into how endogenous RA programs the early embryo.