SUMMARYBody axis elongation is a hallmark of the vertebrate embryo, involving the architectural remodelling of the tailbud. Although it is clear how bi-potential neuro-mesodermal progenitors (NMPs) contribute to embryo elongation, the dynamic events that lead to de novo lumen formation and that culminate in the formation of a 3-Dimensional, secondary neural tube from NMPs, are poorly understood. Here, we used in vivo imaging of the chicken embryo to show that cell intercalation downstream of TGF-beta/SMAD3 signalling is required for secondary neural tube formation. Our analysis describes the initial events in embryo elongation including lineage restriction, the epithelial-to-mesenchymal transition of NMPs, and the initiation of lumen formation. Importantly, we show that the resolution of a single, centrally positioned continuous lumen, which occurs through the intercalation of central cells, requires SMAD3 activity. We anticipate that these findings will be relevant to understand caudal, skin-covered neural tube defects, amongst the most frequent birth defects detected in humans.HIGHLIGHTS.- Initiation of the lumen formation follows the acquisition of neural identity and epithelial polarization..- Programmed cell death is not required for lumen resolution..- Resolution of a single central lumen requires cell intercalation, driven by Smad3 activity.- The outcome of central cell division preceding cell intercalation, varies along the cranio-caudal axis.