Mutations in Hoxa13 cause malformations of the appendicular skeleton and genitourinary tract including digit loss, syndactyly, and hypospadias. To determine the molecular basis for these defects, the DNA sequences bound by HOXA13 were empirically determined, revealing a novel high affinity binding site. Correlating the utilization of this high affinity binding site with genes exhibiting perturbed expression in Hoxa13 mutant limbs, we identified that HOXA13 suppresses the expression of the BMP antagonist, Sostdc1. In the absence of HOXA13 function, Sostdc1 is ectopically expressed in the distal limb, causing reduced expression of BMP-activated genes and decreased SMAD phosphorylation. Limb chromatin immunoprecipitation revealed HOXA13 binding at its high affinity site in two conserved Sostdc1 regulatory sites in vivo. In vitro, HOXA13 represses gene expression through the Sostdc1 high affinity binding sites in a dosage-dependent manner. Together, these findings confirm that the high affinity HOXA13 binding site deduced by quantitative analyses is used in vivo to facilitate HOXA13 target gene regulation, providing a critical advance towards understanding the molecular basis for defects associated with the loss of HOXA13 function.