Thyroid hormones are crucial for organismal development and homeostasis. In humans, untreated congenital hypothyroidism due to thyroid agenesis inevitably leads to cretinism, which comprises irreversible brain dysfunction and dwarfism. Elucidating how the thyroid gland – the only source of thyroid hormones in the body – develops is thus key for understanding and treating thyroid dysgenesis, and for generating thyroid cells in vitro that might be used for cell-based therapies. Here, we review the principal mechanisms involved in thyroid organogenesis and functional differentiation, highlighting how the thyroid forerunner evolved from the endostyle in protochordates to the endocrine gland found in vertebrates. New findings on the specification and fate decisions of thyroid progenitors, and the morphogenesis of precursor cells into hormone-producing follicular units, are also discussed.