Hydra attenuata were rendered free of interstitial cells (I cells) and interstitial cell derivatives by colchicine treatment. These hydra were then cloned and cultivated for 18 months and their developmental capacities were studied. Some experimental hydra possessed a few (about 1% of the normal numbers) interstitial cells and retained this low level during prolonged culture and active growth without the differentiation of I-cells into specialized cells. Other hydra were completely freed of interstitial cells by the colchicine treatment. Maceration and histological analyses showed that once a hydra is freed of all interstitial cells it does not recover them, nor do its buds contain interstitial cells. I cell-free hydra also lack nerve cells, nematocytes, gametes and endodermal gland cells, and the tissue consists only of ectodermal and endodermal epithelial cells. Hydra completely lacking interstitial cells grow, bud, exhibit tissue renewal patterns, regenerate and preserve polarity generally typical of normal hydra. I cell-free hypostomal tissue has inductive capacity, as does normal hypostomal tissue, when implanted in I cell-free or normal gastric tissue. Regenerating I cell-free tissue undergoes precocious determination as does normal tissue. Only in some quantitative aspects do I cell-free hydra develop abnormally. We conclude that hydra consisting only of epithelial cells are capable of essentially normal development.