The esophagus is derived from the anterior portion of the foregut endoderm, which also gives rise to the respiratory system. As it develops, the esophageal lining is transformed from a simple columnar epithelium into a stratified squamous cell layer, accompanied by the replacement of unspecified mesenchyme with layers of muscle cells. Studies in animal models have provided significant insights into the roles of various signaling pathways in esophageal development. More recent studies using human pluripotent stem cells (hPSCs) further demonstrate that some of these signaling pathways are conserved in human esophageal development. In addition, a combination of mouse genetics and hPSC differentiation approaches have uncovered new players that control esophageal morphogenesis. In this Review, we summarize these new findings and discuss how the esophagus is established and matures throughout different stages, including its initial specification, respiratory-esophageal separation, epithelial morphogenesis and maintenance. We also discuss esophageal muscular development and enteric nervous system innervation, which are essential for esophageal structure and function.