A culture system with defined medium has been utilized to elucidate the role of thyroxine (T4) and hydrocortisone (HC) in growth and differentiation of the epithelium of embryonic chick duodenum during the third week of development. Duodenal explants maintained a basically normal morphology for 48 to 72 hours, but during subsequent culture, muscle and mesenchyme deteriorated, previllous ridges shrank, the epithelial surface became pitted, and the tissue lost weight. These degenerative processes were retarded by addition of HC to the culture medium. Previllous ridges of cultured duodenum failed to develop into true villi and ridge growth was subnormal. Epithelial mitotic counts were increased by T4 or HC, as compared to cultured control tissue, but dropped below values in vivo, by 72 hours in culture. Epithelial differentiation proceeded more rapidly in duodenum cultured without hormones than in vivo. Increase in cell height, flattening of the epithelial surface, attainment of uniform staining of the brush border with periodic acid-Schiff, increase in microvillar density, and formation of a terminal web were accelerated by 24 to 48 hours in culture. In the presence of T4, cell height and microvillar growth were stimulated further, reaching the state found at 19 to 21 days in vivo.