Epithelial–mesenchymal interactions are crucial for the development of the endoderm of the pharyngeal pouches into the epithelia of thymus and parathyroid glands. Here we investigated the dynamics of epithelial–mesenchymal interactions that take place at the earliest stages of thymic and parathyroid organogenesis using the quail-chick model together with a co-culture system capable of reproducing these early events in vitro. The presumptive territories of thymus and parathyroid epithelia were identified in three-dimensionally preserved pharyngeal endoderm of embryonic day 4.5 chick embryos on the basis of the expression of Foxn1 and Gcm2, respectively: the thymic rudiment is located in the dorsal domain of the third and fourth pouches, while the parathyroid rudiment occupies a more medial/anterior pouch domain. Using in vitro quail-chick tissue associations combined with in ovo transplantations, we show that the somatopleural but not the limb bud mesenchyme, can mimic the role of neural crest-derived pharyngeal mesenchyme to sustain development of these glands up to terminal differentiation. Furthermore, mesenchymal-derived Bmp4 appears to be essential to promote early stages of endoderm development during a short window of time, irrespective of the mesenchymal source. In vivo studies using the quail-chick system and implantation of growth factor soaked-beads further showed that expression of Bmp4 by the mesenchyme is necessary during a 24h-period of time. After this period however, Bmp4 is no longer required and another signalling factor produced by the mesenchyme, Fgf10, influences later differentiation of the pouch endoderm. These results show that morphological development and cell differentiation of thymus and parathyroid epithelia require a succession of signals emanating from the associated mesenchyme, among which Bmp4 plays a pivotal role for triggering thymic epithelium specification.