Recent developments of the investigations on the molecular basis of anhidrotic ectodermal dysplasia are reviewed. Identification of the major product of the EDA gene (ectodysplasin A), a protein belonging to a group of TNF ligands, and molecular cloning of the cDNA, encoding its receptor (EDAR), a member of the TNF receptor family, are presented. The role of an alternative EDA receptor, localised on the X chromosome (XEDAR) in the developmental control of the differentiation of skin appendages, is discussed. Recent findings have elucidated the cause of the autosomal forms of EDA, both dominant and recessive, and indicated an important role of a signal transduction pathway involving a protein product of the NEMO gene and the transcription factor NFkappaB in the differentiation of skin appendages.