The freshwater cnidarian Hydra was first described in 17021 and has been the object of study for 300 years. Experimental studies of Hydra between 1736 and 1744 culminated in the discovery of asexual reproduction of an animal by budding, the first description of regeneration in an animal, and successful transplantation of tissue between animals2. Today, Hydra is an important model for studies of axial patterning3, stem cell biology4 and regeneration5. Here we report the genome of Hydra magnipapillata and compare it to the genomes of the anthozoan Nematostella vectensis6 and other animals. The Hydra genome has been shaped by bursts of transposable element expansion, horizontal gene transfer, trans-splicing, and simplification of gene structure and gene content that parallel simplification of the Hydra life cycle. We also report the sequence of the genome of a novel bacterium stably associated with H. magnipapillata. Comparisons of the Hydra genome to the genomes of other animals shed light on the evolution of epithelia, contractile tissues, developmentally regulated transcription factors, the Spemann–Mangold organizer, pluripotency genes and the neuromuscular junction.

To isolate new peptide signal molecules involved in regulating developmental processes in hydra, a novel screening project was developed. Peptides extracted from the tissue of Hydra magnipapillata were systematically purified to homogeneity using HPLC. A fraction of each purified peptide was examined by differential display-PCR for its ability to affect gene expression in hydra. Another fraction was used to determine the tentative structure using an amino acid sequence analyzer and͞or a mass spectrometer. Based on the results, peptides of potential interest were selected for chemical synthesis, followed by confirmation of the identity of the synthetic with the native peptides using HPLC. Using this approach, 286 peptides have been isolated, tentative amino acid sequences have been determined for 95 of them, and 19 synthetic peptides identical to native ones were produced. The 19 synthetic peptides were active in a variety of biological tests. For example, Hym-54 stimulated muscle contraction in adult polyps of hydra and sea anemone, Anthopleura fuscoviridis, and induced metamorphosis of planula, the larval stage, into polyps in a marine hydrozoan species, Hydractinia serrata. Another peptide, Hym-33H, inhibited nerve cell differentiation in hydra and induced tissue contraction in planula of Hydractinia serrata. The evidence obtained so far suggests that hydra contains a large number (>350) of peptide signal molecules involved in regulating developmental or other processes in cnidaria. These peptides can be isolated and their functions examined systematically with the new approach developed in this study.