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Exposure of the vertebrate embryo to maternal hormones can have long-lasting effects on its phenotype, which has been studied extensively by experimentally manipulating maternal steroids, mostly androgens, in bird eggs. Yet, there is a severe lack of understanding of how and when these effects are actually mediated, hampering both underlying proximate and ultimate explanations. Here we report a novel finding that the embryo expresses androgen receptor (AR) and estrogen receptor (ERα) mRNA in its extraembryonic membranes (EMs) as early as before its own hormone production starts, suggesting a novel substrate for action of maternal hormones on the offspring. We also report the first experimental evidence for steroid receptor regulation in the avian embryo in response to yolk steroid levels: the level of AR is dependent on yolk androgen levels only in the EMs but not in body tissues, suggesting embryonic adaptation to maternal hormones. The results also solve the problem of uptake of lipophilic steroids from the yolk, why they affect multiple traits, and how they could mediate maternal effects without affecting embryonic sexual differentiation.