The development of the cholinergic or parasympathetic nervous system was studied in embryonic lung dissociated from the central nervous system and placed in organ culture. In vitro development was similar to that seen in vivo. This study demonstrated that migration of neuroblasts from the central nervous system to the trachea takes place before day 12. Neuroblasts differentiate to small immature ganglia and then to larger more mature ganglia that give off nerve fibers to the submucosa and the epithelium. This isolated lung preparation was used to study neurostimulators. Thyroxine (T4) was found to accelerate nerve fiber growth and differentiation of ganglia in vitro. The neuroepithelial body, an epithelial cell with acetylcholine-esterase-positive granules, also differentiated in vitro. This cell may fill the morphologic criteria of an intrapulmonary chemoreceptor.