The structure of the areas pellucida and vasculosa of the early chick embryo (stages 11-29) was examined by light, transmission and scanning electron microscopy. The most striking feature of the endodermal cells of these areas is the presence of large intracellular yolk drops which are characteristic of the regions in which they are found; lipid-like homogeneous drops in the area pellucida, heterogeneously composed pleomorphic drops in the mid-region of the area vasculosa and granular drops at the periphery of the area vasculosa in the region of the sinus terminalis. On morphological criteria it is postulated that granular drops may arise by direct engulfment of extracellular yolk, but this does not appear to be true for pleomorphic or homogeneous drops. Since the apical junctions between endodermal cells across the yolk sac are tight, they seal off the extraembryonic compartment from the vitelline circulation and presumably prevent intercellular passage of the yolk constituents. Thus the endodermal epithelium must mediate the transport of nutrients from the yolk mass to the developing embryo. Endodermal cells exhibit a variation across the yolk sac in the presence and number of structures associated with uptake of extracellular materials. The mid-region of the area vasculosa appears to be the most endocytotically active region with an abundance of microvilli, bristle-coated pits and vesicles and apical canaliculi and vacuoles. There is a close association between the endoderm and vitelline blood vessels and this association is maintained, as the yolk sac develops, by the formation of small vessels juxtaposed between the vascular surface of the endoderm and the walls of the large vitelline vessels.