AbstractThe initial differentiation of endoderm at the time of onset of implantation, and the subsequent rapid differentiation of visceral and parietal endoderm were studied in the rat and mouse. Transmission electron microscopy illustrates the reorientation and loosening of embryonic cell mass cells during implantation, as well as cytological evidence that endoderm cells have differentiated. Using scanning electron microscopy, parietal endoderm consists of individual stellate cells with numerous peripheral branching filopodia. As these cells migrate abembryonically, the rest of the embryonic cell mass becomes recom‐pacted. The visceral endoderm proliferates and forms a columnar epithelium which has the cytological characteristic of an absorptive epithelium and is able to ingest exogenous proteins. Thus, by 24 hours after implantation, the two endo‐dermal derivatives have assumed widely diverse shapes and different types of associations and rates of replication, and are probably performing different functi