Ring-shaped pieces of hydra tissue were excised from a specified position on a body column of 20-30 polyps and grafted together in tandem like a chain of beads. A "tandem graft" prepared in this way has the same basic tissue organization and same tube-like morphology as a normal hydra body column, but lacks the head, foot, and developmental gradients ordinarily present. Three major types of structures were formed along the length of the tandem graft: heads, buds, and feet. The relative number of these structures produced was strongly affected by the origin of the tissue used to prepare the tandem graft. Evidence was obtained which suggests that tissue originally located outside of the budding zone in intact hydra has a strong latent capacity to form a bud, and that the level of this capacity forms a gradient from the budding zone toward the hypostome. Evidence was also obtained which is consistent with the view that the head and foot forming mechanisms cross-react positively, increasing the chances for these two structures to be formed next to each other on a tandem graft.