Four and a half LIM domain 2 (FHL2) is a multifunctional scaffolding protein of well-known function regulating cell signalling cascades and gene transcription in cancer tissues. However, its function in embryonic systems is poorly characterized. Here, we show that Fhl2 is involved in the differentiation of connective tissues of developing limb autopod. We show that Fhl2 exhibits spatially restricted and temporally dynamic expression around the tendons of developing digits, interphalangeal joint capsules, and fibrous peridigital tissue. Immunolabelling analysis of the skeletal progenitors identified a predominant, but not exclusive, cytoplasmic distribution of FHL2 being associated with focal adhesions and actin cytoskeleton. In the course of chondrogenic differentiation of cultures of limb skeletal progenitors, the expression of Fhl2 is down-regulated. Furthermore, cultures of skeletal progenitors overexpressing Fhl2 take on a predominant fibrogenic appearance. Both gain-of-function and loss-of-function experiments in the micromass culture assays revealed a positive transcriptional influence of Fhl2 in the expression of fibrogenic markers including Scleraxis, Tenomodulin, Tenascin C, βig-h3, and Tgif1. We further show that the expression of Fhl2 is positively regulated by profibrogenic signals including Tgfβ2, all-trans-retinoic acid, and canonical Wnt signalling molecules and negatively regulated by prochondrogenic factors of the bone morphogenetic protein family. Expression of Fhl2 is also regulated negatively in immobilized limbs, but this influence appears to be mediated by other connective tissue markers, such as Tgfβs and Scleraxis.,Copyright © 2018 John Wiley & Sons, Ltd.