The molecular mechanisms underlying the development of the external genitalia in mammals have been very little examined. Recent gene knockout studies have suggested that the developmental processes of its anlage, the genital tubercle (GT), have much in common with those of limb buds. The Fgf genes have been postulated as regulating several downstream genes during organogenesis. Fgf8 was expressed in the distal urethral plate epithelium of the genital tubercle (GT) together with other markers such as the Msx1, Fgf10, Hoxd13 and Bmp4 expressed in the mesenchyme. To analyze the role of the FGF system during GT formation, an in vitro organ culture system was utilized. It is suggested that the distal urethral plate epithelium of GT, the Fgf8-expressing region, regulates the outgrowth of GT. Ectopic application of FGF8 beads to the murine GT induced mesenchymal gene expression, and also promoted the outgrowth of the GT. Experiments utilizing anti-FGF neutralizing antibody suggested a growth-promoting role for FGF protein(s) in GT outgrowth. In contrast, despite its vital role during limb-bud formation, Fgf10 appears not to be primarily essential for initial outgrowth of GT, as extrapolated from Fgf10(−/−) GTs. However, the abnormal external genitalia development of Fgf10(−/−) perinatal mice suggested the importance of Fgf10 in the development of the glans penis and the glans clitoridis. These results suggest that the FGF system is a key element in orchestrating GT development.