Congenital hypothyroidism is mainly due to structural defects of the thyroid gland, collectively known as thyroid dysgenesis. The two most prevalent forms of this condition are abnormal localization of differentiated thyroid tissue (thyroid ectopia) and total absence of the gland (athyreosis). The clinical picture of thyroid dysgenesis suggests that impaired specification, proliferation and survival of thyroid precursor cells and loss of concerted movement of these cells in a distinct spatiotemporal pattern are major causes of malformation. In normal development the thyroid primordium is first distinguished as a thickening of the anterior foregut endoderm at the base of the prospective tongue. Subsequently, this group of progenitors detaches from the endoderm, moves caudally and ultimately differentiates into hormone-producing units, the thyroid follicles, at a distant location from the site of specification. In higher vertebrates later stages of thyroid morphogenesis are characterized by shape remodeling into a bilobed organ and the integration of a second type of progenitors derived from the caudal-most pharyngeal pouches that will differentiate into C-cells. The present knowledge of thyroid developmental dynamics has emerged from embryonic studies mainly in chicken, mouse and more recently also in zebrafish. This review will highlight the key morphogenetic steps of thyroid organogenesis and pinpoint which crucial regulatory mechanisms are yet to be uncovered. Considering the co-incidence of thyroid dysgenesis and congenital heart malformations the possible interactions between thyroid and cardiovascular development will also be discussed.