The egg of the direct‐developing frog, Eleutherodactylus coqui, has 20× the volume as that of the model amphibian, Xenopus laevis. Increased egg size led to the origin of nutritional endoderm, a novel cell type that provides nutrition but does not differentiate into digestive tract tissues. As the E. coqui endoderm develops, a distinct boundary exists between differentiating intestinal cells and large yolky cells, which persists even when yolk platelets are depleted. The yolky cells do not become tissues of the digestive tract and are lost, as shown by histology and lineage tracing. EcSox17, an endodermal transcriptional factor, did not distinguish these two cell types, however. When cleavage of the yolky cells was inhibited, embryogenesis continued, indicating that some degree of incomplete cleavage can be tolerated. The presence of cellularized nutritional endoderm in E. coqui may parallel changes that occurred in the evolution of the amniote egg 360 million years ago. Developmental Dynamics 236:1259–1272, 2007. © 2007 Wiley‐Liss, Inc. [ABSTRACT FROM AUTHOR]