The so-called extra-embryonic tissues are important for embryonic development in many animals, although they are not considered to be part of the germ band or the embryo proper. They can serve a variety of functions, such as nutrient uptake and waste removal, protection of the embryo against mechanical stress, immune response and morphogenesis. In insects, a subgroup of arthropods, extra-embryonic tissues have been studied extensively and there is increasing evidence that they might contribute more to embryonic development than previously thought. In this review, we provide an assessment of the occurrence and possible functions of extra-embryonic tissues in the closest arthropod relatives, onychophorans (velvet worms) and tardigrades (water bears). While there is no evidence for their existence in tardigrades, these tissues show a remarkable diversity across the onychophoran subgroups. A comparison of extra-embryonic tissues of onychophorans to those of arthropods suggests shared functions in embryonic nutrition and morphogenesis. Apparent contribution to the final form of the embryo in onychophorans and at least some arthropods supports the hypothesis that extra-embryonic tissues are involved in organogenesis. In order to account for this role, the commonly used definition of these tissues as 'extra-embryonic' should be reconsidered.This article is part of the theme issue 'Extraembryonic tissues: exploring concepts, definitions and functions across the animal kingdom'.