The yolk sac (YS) consists of the yolk, which supplies nutrients, and the YS tissue, which surrounds the yolk and provides essential metabolic functions for the developing embryo. The YS tissue is derived from the midgut of the embryo and consists of a layer of endodermal epithelial cells (EEC) in contact with the yolk contents, a mesodermal layer that contains the vascular system and an outer ectodermal layer. The YS tissue is a multifunctional organ that provides essential functions such as host immunity, nutrient uptake, carbohydrate and lipid metabolism, and erythropoiesis. The YS tissue plays a role in immunity by the transport of maternal antibodies in the yolk to the embryonic circulation that feeds the developing embryo. In addition, the YS tissue expresses high mRNA levels of the host defense peptide, avian b-defensin 10 during mid embryogenesis. Owing to its origin, the YS EEC share some functional properties with intestinal epithelial cells such as expression of transporters for amino acids, peptides, monosaccharides, fatty acids, and minerals. The YS tissue stores glycogen and expresses enzymes for glycogen synthesis and breakdown and glucogenesis. This carbohydrate metabolism may play an important role in the hatching process. The mesodermal layer of the YS tissue is the site for erythropoiesis and provides erythrocytes before the maturation of the bone marrow. Other functions of the YS tissue involve synthesis of plasma proteins, lipid transport and cholesterol metabolism, and synthesis of thyroxine. Thus, the YS is an essential organ for the growth, development, and health of the developing embryo. This review will provide an overview of the studies that have investigated the functionalities of the YS tissue at the cellular and molecular levels with a focus on chickens.