The development of the atrioventricular node and bundle of His of embryonic chick hearts was studied by electrophysiological and morphological techniques. The dorsal wall of the AV canal and the interatrial septum were explored to determine if they contribute to the formation of the AV node and bundle of His. The resting membrane and action potentials of the interatrial septum cells were systematically analyzed and found to undergo progressive differentiation with development. The earliest identification of the AV node and upper bundle of His group of cells was achieved at 5 1/2–6 days of development by the electrical recording of their corresponding characteristic action potentials, from a circumscribed area located in the lowest and dorsal segment of the interatrial septum. The morphological and anatomical characterization of the cells was made following electrical recording and labelling with charcoal particles. The earlier AV node and bundle of His responses had similar characteristics to those of the adult heart. It is concluded that the AV node and upper bundle of His cells derive from the low interatrial septum. The possibility that AV canal cells contribute to this event was discarded. The functional relationship of the Av node and bundle of His with other cardiac tissues during the early development of the heart is discussed.