AbstractUnderin situconditions, the innermost (juxtaventricular) neuroepithelial layer of the embryonic brain wall develops into ependyma. No development of ependyma was usually observed, however, in transplanted embryonic brain wall. In our telencephalic transplants, however, cysts lined by epithelium resembling ependyma were observed, although only sporadically. We supposed that occasional foldings of the transplanted telencephalic wall enclosed the aforementioned cysts and so induced the formation of ependyma. This hypothesis was supported by the observation that ependyma developed frequently in a model system in which the telencephalic wall was folded artificially prior to transplantation.