Mice homozygous for the recessive mutation vestigial tail (vt), which arose spontaneously on Chromosome 11, exhibit vertebral abnormalities, including loss of caudal vertebrae leading to shortening of the tail. Wnt-3a, a member of the wingless family of secreted glycoproteins, maps to the same chromosome. Embryos homozygous for a null mutation in Wnt-3a (Wnt-3a(neo)) have a complete absence of tail bud development and are truncated rostral to the hindlimbs. Several lines of evidence reveal that vt is a hypomorphic allele of Wnt-3a. We show that Wnt-3a and vt cosegregate in a high-resolution backcross and fail to complement, suggesting that Wnt-3a(neo) and vt are allelic. Embryos heterozygous for both alleles have a phenotype intermediate between that of Wnt-3a(neo) and vt homozygotes, lacking a tail, but developing thoracic and a variable number of lumbar vertebrae. Although no gross alteration in the Wnt-3a gene was detected in vt mice and the Wnt-3a coding region was normal, Wnt-3a expression was markedly reduced in vt/vt embryos consistent with a regulatory mutation in Wnt-3a. Furthermore, the analysis of allelic combinations indicates that Wnt-3a is required throughout the period of tail bud development for caudal somitogenesis. Interestingly, increasing levels of Wnt-3a activity appear to be necessary for the formation of more posterior derivatives of the paraxial mesoderm.