Using bromodeoxyuridine incorporation to label cells in S phase we found that ectodermal epithelial cells of Hydra can start and complete their terminal differentiation in the G2 phase of the cell cycle. Most of the cells traversed their last S phase before the signal for differentiation, namely excision of head or foot, was given. The S phase inhibitor aphidicolin accordingly did not inhibit head or foot specific differentiation. The results show that differentiation to either head- or foot-specific ectodermal epithelial cells can start and is completed within the same G2 phase. This is therefore the first description of a complete differentiation from a population of proliferating cells to terminally differentiated, cell cycle-arrested cells without the necessity of passing through an S phase or mitosis.