Chimeric hydra were produced by making use of a strain (nf-1) which lacks interstitial cells, nerve cells and nematocytes. This strain arises by spontaneous loss of interstitial cells from its parental strain (sf-1) (Sugiyama & Fujisawa, 1978). Reintroduction of interstitial cells from other strains into nf-1 leads to the creation of chimeric strains that consisted of epithelial cells derived from strain sf-1 and interstitial cells and their derivatives (nerves and nematocytes) from other strains. In chimeras, interstitial or epithelial cells apparently maintain very stable cell lineages; no indication was obtained that suggested interstitial cell differentiation into epithelial cells or dedifferentiation in the opposite direction during the long courses of chimera cultures (up to one year). Developmental characters of chimeras were examined and compared to those of the epithelial cell (sf-1) and the interstitial cell donors. Almost all of the chimera's characters examined (growth rate, budding rate, tentacle numbers, polyp size, regenerative capacity, etc.) closely resembled those of the epithelial cell donor, but not of the interstitial cell donors. This suggests that epithelial cells, rather than interstitial or nerve cells, are the primary determinant of most, if not all, of hydra developmental characters.