The embryonic neural tube is the origin of the entire adult nervous system, and disturbances in its development cause life-threatening birth defects. However, the study of mammalian neural tube development is limited by the lack of physiologically realistic three-dimensional (3D) in vitro models. Here, we report a self-organizing 3D neural tube organoid model derived from single mouse embryonic stem cells that exhibits an in vivo-like tissue architecture, cell type composition and anterior-posterior (AP) patterning. Moreover, maturation of the neural tube organoids showed the emergence of multipotent neural crest cells and mature neurons. Single-cell transcriptome analyses revealed the sequence of transcriptional events in the emergence of neural crest cells and neural differentiation. Thanks to the accessibility of this model, phagocytosis of migrating neural crest cells could be observed in real time for the first time in a mammalian model. We thus introduce a tractable in vitro model to study some of the key morphogenetic and cell type derivation events during early neural development.