At the five-vesicle stage, the prosencephalon separates into the diencephalon (prethalamus, thalamus, hypothalamus, subthalamus, epithalamus, and pretectum) and the telencephalon (cerebrum). The cerebrum consists of the cerebral cortex, underlying white matter, and the basal ganglia.
When the embryonic prosencephalon fails to divide the brain into two lobes, it results in a condition known as holoprosencephaly.