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Fetal development of the unique papillary body and its localized peculiarities in the equine hoof are described based on the study of 51 fetuses, nine newborn foals, and five adult horses. The shape and dimensions of the dermal papillae and lamellae have a formative influence on the structure and physical quality of the corneous hoof capsule with its horn tubules and lamellae. The size and arrangement of these horn structures determine the mechanical quality of hoof horn. Proper horn quality is a prerequisite for the various functions of the hoof capsule, such as protecting the living dermis supporting the hoof capsule, shock absorption, and formation of the suspensory apparatus of the distal phalanx. Development of the segment-specific papillary body is initiated by the increasing mitotic activity of the epidermal cells invaginating the dermal surface, thus forming dermal microridges. These microridges are transformed into single dermal papillae, which are arranged in rows, or enlarged to become primary and secondary dermal lamellae. The formation of a segment-specific papillary body enables the increasing keratinization ratio in the hoof epidermis and the formation of the characteristic tubular and lamellar horn responsible for the special mechanical properties of hoof horn.