We ultrastructually examined the chick yolk sac endodermal epithelium and evaluated our findings in combination with the biochemical analysis of serum and yolk lipoproteins. Twenty-five to 30 nm-sized particles were demonstrated to be a principal element of the extracellular yolk mass and these were determined to be yolk very low density lipoprotein (VLDL). The particles were shown to be taken up by the epithelial cells via coated pits and engulfed by plasma membrane invaginations together with yolk subdroplets, another element of the yolk mass. Through apical vacuoles, the two yolk elements were incorporated into yolk drops, which were identified to be one of the lysosomal structures by a cytochemical procedure using acid phosphatase (AcP)ase activity. During the last week of incubation, which is the final third of the incubation period, the digestion seemed to progress rapidly in the yolk drops, which came to resemble lipolysosomes; lipoprotein production became active as expressed by an enlarged Golgi apparatus. The newly produced lipoprotein particles were electron-lucent and irregular in size (50-120 nm). They were sequestered in secretory vacuoles and secreted from the vascular surface of the epithelial cells. Finally, the particles were thought to be taken into the vitelline circulation as plasma lipoproteins. The major component of lipoprotein in serum was determined to be low density lipoprotein (LDL) and high density lipoprotein (HDL), while cholesterol content was found to increase during incubation. We concluded that endodermal epithelial cells participate the synthesis of plasma LDL and HDL. For this synthesis the cells probably apply lipids and apo-protein generated from yolk VLDL degradation.