Cranio-caudal and lateral folding of the embryo causes the incorporation of the part of the yolk sac into the body cavity and the formation of a tube-like gut.
This layer gives rise to the epithelial lining of the:

• gastrointestinal system,
• repiratory system,
• urinary bladder and urethra,
• tympanic cavity and auditory tube, and
• the parenchyme of the tonsils, thyroid, parathyroid, thymus, liver and pancreas.
  

1. Foregut
2. Hindgut
3. Midgut
4. Tracheobronchial diverticulum
5. Heart
6. Liver bud
7. Buccopharyngeal membrane
8. Vitelline duct
9. Allantois
10. Cloacal membrane

1. Stomodeum
2. Hindgut
3. Pancreas
4. Urorectal septum
5. Cloaca
6. Interstinal loop
7. Allantois
8. Liver
9. Tracheobronchial diverticulum
10. Esophagus
11. Pharyngeal pouches