Functional differentiation of the duodenum of normal chick embryos from 15.75 to 20.5 days of incubation was studied using the following parameters: (1) the dry weight of the whole duodenum increases from 4.1 to 12.4 mg., (2) the alkaline phosphatase activity of the, whole duodenum increases from less than 12 to 426 units, (3) the length of the villi increases approximately five-fold by 20.5 days of incubation, (4) the height of the epithelial cells at the villous tips increases from 12.9 to 25.9 u, (5) the shape of the epithelial cells which changes from low columnar, to cuboidal, to high columnar, (6) the shape of the nuclei of most of these cells progresses from sphero-ovoid to ovoid by 20.5 days of incubation, (7) the distribution of mitotic figures, which occurs at first throughout the epithelium, by 20.5 days is restricted to the crypts of Lieberklihn, (8) glycogen, which appears on day 15.75, but is absent by 20.5 days, (9) a mucopolysaccharide at the brush border becomes progressively increased by 20.5 days, and (10) the presence of alkaline phosphatase at the brush border in low levels at 16.75 days becomes progressively more intense by 20.5 days of incubation. In hypophysectomized embryos aged 19.75 to 21.5 days a study of the above parameters showed that the level of duodenal differentiation attained, approximated that found in normal embryos at 16.75 to 17.75 days. In hypophysectomized embryos aged 19.75 and 20.5 days which had received a pars distalis homograft at 9.5 days of incubation, the above parameters showed that the duodena had attained normal levels of differentiation. In another group of hypophysectomized embryos aged 19.75 days with grafts in which the grafts had become atrophic, the level of duodenal differentiation was not different from untreated hypophysectomized embryos of the same age. Fresh body weights and measurements of the third toe were recorded as added indices of the status of the pars distalis. In chick embryos, the functional differentiation of the duodenal epithelium which takes place during the latter part of incubation depends on the hormones of the pars distalis.