Adhesive toepads are considered the key innovation that gave Anolis lizards, or anoles, unfettered access to arboreal habitats. Following their origin toepad morphology diversified dramatically among species living in different arboreal habitats. We have investigated the developmental bases for the origin and subsequent diversification of the anole toepad. In Anolis, the plantar scales associated with the toepads are the first scales to form on the body, which is a distinct progression of scale development compared to closely related species lacking toepads. Within Anolis, the early stages of toepad development are conserved among species. Diversification of toepad morphology appears to occur within the embryo through a common mechanism among all anoles. Using ex ovo culturing techniques with small molecule inhibitors we have also demonstrated that it is possible to developmentally decouple toe scale and toepad development, despite their intimate evolutionary and functional relationships. Our results demonstrate that the the origin and diversification of this key innovation occurred through distinct developmental processes.