The ultrastructure of the albino rat embryo pineal gland was studied from day 13 of development through birth. In the first stages (13-16.5 days of development) the pineal evagination presents a barely differentiated epithelium. From 17 days onward the transformation of the pineal gland from a tubular evagination into a compact organ occurs. The obliteration of the recess takes place by means of two mechanisms: (a) multiple foldings of the epithelium which determine an approximation and fusion of the walls of the recess, and (b) occupation of the lumen by cells extruded from the pineal epithelium. Embryos of 18-21 days of gestation still show remains of the pineal recess. From day 16.5 onward elements of the pineal parenchyma have been found outside the pineal epithelium contour. They contact with the mesenchymal cells without a basal lamina separating both elements. Day 20 marks the beginning of recognizable differentiation of pineal cellular types. However, in the newborn rat these types are not yet clearly established.