of the caudal part of the septum transversum (which is serving as the ventral mesogastrium). In this mesoderm the endodermal cells of both divisions of pars hepatica rapidly proliferate and give rise to two partially separate masses of endodermal cells, which represent the right and left lobes of the liver. The endodermal cells differentiate into hepatocytes, which become arranged as interlacing cellular cords. The liver cords are hollow from the very beginning and the tiny tubular passages contained within them are called bile canaliculi. The endodermal cells also give rise to the epithelial lining of the intrahepatic biliary ducts. The ramifying liver cords anastomose around endothelium-lined spaces called liver sinusoids, which develop from the mesoderm of the septum