The developing chick limb has the remarkable ability to regulate for the loss of large amounts of mesenchyme and maintain a normal limb pattern in early (Hamburger and Hamilton Stage 19; E3) limbs. How the limb can regulate for tissue loss and why this ability is lost as development proceeds (after Hamburger and Hamilton Stage 21; E3.5) is unclear. We have investigated the origins of cells involved in regulative processes and, for the first time, the molecular changes occurring, and find striking differences between developmental time points just 0.5 days apart. We demonstrate that subtle changes in cell dispersal and cell proliferation occur in HH St21 limbs but not in HH St19 limbs and also demonstrate that there is no net replacement of removed tissue at either HH St21 or St19. We further show that changes in the Fgf8/Shh/Bmp4/Gremlin signaling pathway together with the appearance of distal Hox gene activation coincide with the limbs' ability to regulate for large tissue loss. We also demonstrate that following small tissue loss, limbs can regulate for missing tissue to produce normal pattern with no net replacement of missing tissue, as seen in limbs following large tissue loss. Our results indicate the regulative ability of the limb is not due to changes in cell proliferation, cell lineage nor replacement of the missing tissue – regulative ability is reliant upon the signaling environment remaining.