In the Merino sheep (Ovis aries) four pharyngeal pouches and an ultimobranchial (postbranchial) body attached to the last pouch are formed. The development of the second and third pharyngeal pouches and of complex IV is described and discussed. Complex IV does not reach the ectoderm. A thymus II was found to exist only for two to three days. The cervical vesicle IV contributes to thymus III formation. The ultimobranchial body participates in thyroid formation while remnants of it remain as epithelial cysts in the adult thyroid. Such aberrant thyroid tissue may give rise to new follicles or undergo pathological changes if adequately stimulated (for example by iodine deficiency or in cases of increased thyroid activity such as in pregnancy). The possible role played by mesoderm or its derivatives in thyroid, thymus and ultimobranchial body formation is discussed.