Within-species variation in animal body size predicts major differences in life history, for example, in reproductive development, fecundity, and even longevity. Purely from an energetic perspective, large size could entail larger energy reserves, fuelling different life functions, such as reproduction and survival (the "energy reserve" hypothesis).Conversely, larger body size could demand more energy for maintenance, and larger individuals might do worse in reproduction and survival under resource shortage (the "energy demand" hypothesis). Disentangling these alternative hypotheses is difficult because large size often correlates with better resource availability during growth, which could mask direct effects of body size on fitness traits. Here, we used experimental body size manipulation in the freshwater cnidarian Hydra oligactis, coupled with manipulation of resource (food) availability to separate direct effects of body size from resource availability on fitness traits (sexual development time, fecundity, and survival). We found significant interaction between body size and food availability in sexual development time in both males and females, such that large individuals responded less strongly to variation in resource availability. These results are consistent with an energy reserve effect of large size in Hydra. Surprisingly, the response was different in males and females: small and starved females delayed their reproduction, while small and starved males developed reproductive organs faster. In case of fecundity and survival, both size and food availability had significant effects, but we detected no interaction between them. Our observations suggest that in Hydra, small individuals are sensitive to fluctuations in resource availability, but these small individuals are able to adjust their reproductive development to maintain fitness.