Vertebrate limbs originate from the lateral plate mesoderm (LPM) and the overlying ectoderm. While normal limb formation in defined regions has been well studied, the question of whether other positions retain limb-forming potential has not been fully investigated in mice. By ectopically activating β-catenin in the ectoderm with Msx2-cre, we observed that local tissue outgrowths were induced, which either progressed into limb-like structure within the inter-limb flank or formed extra tissues in other parts of the mouse embryo. In the presumptive abdominal region of severely affected embryos, ectopic limb formation was coupled with impaired abdominal ventral body wall (AVBW) closure, which indicates the existence of a potential counterbalance of limb formation and AVBW closure. At the molecular level, constitutive β-catenin activation was sufficient to trigger, but insufficient to maintain the ectopic expression of a putative limb-inducing factor, Fgf8, in the ectoderm. These findings provide new insight into the mechanism of limb formation and AVBW closure, and the crosstalk between the Wnt/β-catenin pathway and Fgf signal.