The development of most organs is characterized by epithelial morphogenesis involving budding, branching, and folding of the epithelium, which is accompanied by growth and differentiation of the epithelial cells. Central mechanisms regulating this development are interactions between the epithelium and the underlying mesenchyme. Studies on the nature of such interactions require the separation of the interacting tissues from each other and the follow-up of their advancing development after various manipulations. The tissues can be either transplanted and their development followed in vivo, or they can be cultured as explants in vitro. Although transplantation methods offer certain advantages, including the correct physiological environment and the possibility for long-term follow-up, organ culture techniques are superior in many other aspects. The development of the tissues can be continuously monitored during in vitro culture. The tissue culture conditions are reproducible, and the composition of the medium is known exactly, and it can be modified. Most importantly, the tissues can be manipulated in multiple controlled ways. The isolated embryonic epithelium may be recombined with different tissues or cells, or it may be cultured on various extracellular matrices. In particular, the in vitro culture conditions allow analyses of the effects of the mesenchymal inductive signals, which can be added to the culture medium or introduced locally with beads or transfected cells.