Hydra is an excellent model system for developmental biology, because
pattern formation processes can be easily studied in regeneration, tra
nsplantation, and reaggregation experiments. At the cellular level hyd
ra has the advantage that it contains only a few basic cell types and
that differentiation pathways are short, Two types of signals, produce
d and released by nerve cells, control the spatial and temporal patter
ns of differentiation. Positive signals induce specific local differen
tiation events, and negative signals inhibit the spread of such induct
ions to larger areas. Head-specific growth and differentiation are con
trolled by head activator and head inhibitor, foot-specific processes
are regulated by foot activator and foot inhibitor, The activators are
peptides, the inhibitors are low-molecular-weight substances. The seq
uence of the head activator is known, and it is conserved throughout t
he animal kingdom. At the cellular level head activator exerts three t
ypes of effects in hydra. It stimulates cells to divide, and it is res
ponsible for the determination and the final differentiation of nerve
cells and head-specific epithelial cells. For nerve-cell differentiati
on the cAMP pathway is used as second messenger system. Components of
this pathway were identified in hydra. In mammals head activator is pr
oduced by nerve and neuro-endocrine cells, and it acts as mitogen on c
ells of neural origin. It is present early in neural development and i
n abnormal neural development, such as brain and neuroendocrine tumour
s.