Rat embryos, 9 1/2 days old, cultured with a 5% or 10% O2 gas phase underwent normal or near-normal cranial neurulation; however, culture at 20% or 40% O2 resulted in abnormal morphogenesis of the cranial neural folds from the 9-somite stage onwards, and the brain tube frequently failed to close. Normal morphogenesis was characterized by a narrowing V-shaped profile, development of a slightly concave neuroepithelial surface, and formation of a sharp mediad curvature of the most lateral region prior to midline apposition and fusion. These morphogenetic events were related to cellular changes within the neuroepithelium, namely cell death, onset of neural crest cell migration, and loss of apical microfilament bundles from the most lateral cells. In 20% and 40% O2-cultured embryos, failure of curvature of the neuroepithelium was associated with failure or retardation of the related cellular changes; it may therefore have been due to the maintenance of an excessive rigidity which opposed the forces involved in bringing about the final stage of brain-tube formation. Mitochondria in normal (low O2 and in vivo) embryos were of the anaerobic type, having few cristae; in high O2-cultured embryos they were of the characteristic aerobic type, indicating an adaptation to the abnormal environment.