In Hydra, the interstitial cells constitute a multipotent stem cell system, forming nerve cells and nematocytes. Differentiation of these product cells varies in an axially dependent manner along the body column, and either of two simple hypotheses can explain this phenomena: (1) position-dependent stem cell determination or (2) selective migration of committed precursor cells. This latter hypothesis predicts that the migrating interstitial cell population is enriched with cells which are restricted in their proliferation and differentiation potential. To test this idea several developmental properties of the migrating cells were compared with those of the total interstitial cell population. The results indicate that those interstitial cells that migrate are not a random sample of the whole population. They contain a lower proportion of stem cells, as shown both by a slower growth rate and by a reduced capacity for clone formation. The migrating population is specifically enriched with interstitial cells that are committed to nerve differentiation. Coupled with previous measurements on migration rates, these findings suggest that the observed position-dependent pattern of nerve differentiation results from the selective redistribution of committed nerve cell precursors.