During the period of early morphogenetic folding of the intestinal epithelium, changes in the epithelial-mesenchymal interface were observed by light microscopy, scanning and transmission electron microscopy. The epithelium in cross-section, appears first as a circle, then an ellipse and finally by a triangle prior to the formation of the first three previllous ridges. The bases of all epithelial cells are flat at the circular stage. At the ellipse and triangle stages the bases of the epithelial cells occupying the sides possess lobopodia that do not penetrate the basal lamina. The immediate mesenchymal cells subjacent to those epithelial cells on the sides of the ellipse and triangle alter their orientation to being rounded-up or perpendicular to the plane of the basal lamina. Large numbers of fine mesenchymal pseudopodia in addition to many extracellular fibrils are revealed by transmission and scanning electron microscopy at the epithelial-mesenchymal interface. The fine mesenchymal pseudopodia come into close contact but do not penetrate the ruthenium red-staining basal lamina. The possible roles of close contact between epithelium and mesenchyme, the alteration in orientation of mesenchyme cells, and of the basal lamina in tissue interaction are discussed.