One of the central problems of vertebrate evolution is understanding the relationship among the distal portions of fins and limbs. Lacking comparable morphological markers of these regions in fish and tetrapods, these relationships have remained uncertain for the past century and a half. Here we show that Gli3 functions in controlling the proliferative expansion of distal progenitors are shared among dorsal and paired fins as well as tetrapod limbs. Mutant knockout gli3 fins in medaka (Oryzias latipes) form multiple radials and rays, in a pattern reminiscent of the polydactyly observed in Gli3-null mutant mice. In limbs, Gli3 controls both anterior-posterior patterning and cell proliferation, two processes that can be genetically uncoupled. In situ hybridization, quantifica-tion of proliferation markers, and analysis of regulatory regions reveal that in paired and dorsal fins, gli3 plays a main role in controlling proliferation but not in patterning. Moreover, gli3 down regulation in shh mutant fins rescues fin loss in a manner similar to how Gli3 deficiency restores digits in the limbs of Shh mutant mouse embryos. We hypothesize that the Gli3/Shh gene pathway preceded the origin of paired appendages and was originally involved in modulating cell proliferation. Accordingly, the distal regions of dorsal fins, paired fins, and limbs retain a deep regulatory and functional homology that predates the origin of paired appendages.