Legs are a defining characteristic of Panarthropoda (Arthropoda, Onychophora, Tardigrada). Arthropod leg development has been extensively studied. To a lesser extent, leg development in Onychophora is also well characterized. However, very little is known about tardigrade leg development. Our studies have revealed several intriguing examples of conservation and diversification of appendage development mechanisms in the tardigrade Hypsibius exemplaris. In arthropods, wnt1 activates Sp6-9 to specify ventral appendages. This mechanism is most likely conserved in onychophorans. By contrast, H. exemplaris is missing wnt1. Wnt4 is expressed in a segmental pattern near where legs will develop in this species. However, as in other panarthropods, Sp6-9 is strongly expressed in developing legs. In arthropods and onychophorans, the leg gap genes regulate appendage growth and specify proximodistal leg identities. Homothorax and extradenticle specify the proximal domain, dachshund the intermediate domain, and Distal-less the distal domain. By contrast, in H. exemplaris, homothorax and extradenticle are co-expressed broadly across most leg buds in H. exemplaris, but they are not expressed in the posteriormost leg buds. Dachshund has been lost in tardigrade genomes. Distal-less is expressed broadly across the leg bud of H. exemplaris. A distal patterning network is active downstream of Distal-less in arthropods. Many features of this network are conserved in onychophorans. However, of the distal patterning genes thus far investigated, only aristaless is expressed in all leg buds during tardigrade development. Placed in a phylogenetic context, our results reveal that leg development has been secondarily simplified in Tardigrada in association with miniaturization.