The LIM-homeodomain protein Lmx1b plays a central role in dorso-ventral patterning of the vertebrate limb. Targeted disruption of Lmx1b results in skeletal defects including hypoplastic nails, absent patellae and a unique form of renal dysplasia (see accompanying manuscript by H. Chen et al.; ref. 2). These features are reminiscent of the dominantly inherited skeletal malformation nail patella syndrome (NPS). We show that LMX1B maps to the NPS locus and that three independent NPS patients carry de novo heterozygous mutations in this gene. Functional studies show that one of these mutations disrupts sequence-specific DNA binding, while the other two mutations result in premature termination of translation. These data demonstrate a unique role for LMX1B in renal development and in patterning of the skeletal system, and suggest that alteration of Lmx1b/LMX1B function in mice and humans results in similar phenotypes. Furthermore, we provide evidence for the first described mutations in a LIM-homeodomain protein which account for an inherited form of abnormal skeletal patterning and renal failure.