Various classifications of congenital anomalies of the extremities and spine have been proposed and are in use. Some are based on anatomy, some on embryology, presumed etiology, or therapeutical approach. An ideal classification would help better understanding and treatment of various kinds of congenital anomalies. It should be simple, logical, and broad enough to include most of the congenital anomalies with minimal confusion. In this paper, we are proposing a functional classification of congenital anomalies of the extremities and spine based upon the concept that development of each organ is processed by differentiation and modulation according to the genetically determined information and by control mechanism at particular moment. We classified congenital anomalies into structural failure where quality of certain tissue is abnormal and functional failure where control mechanisms failed to regulate organogenesis. We divided structural failure into generalized and localized form while we divided functional failure into differentiation and modulation failures. Differentiation failure was subdivided as either forrnation failure or segmentation failure. Formation failure, segmentation failure, and modulation failure were specified according to the timing of failed inhibition and topography.