A central process in the maintenance of axial patterning in the adult hydra is the head activation gradient, i.e. the potential to form a secondary axis, which is maximal in the head and is graded down the body column. Earlier evidence suggested that this gradient was based on a single parameter. Using transplantation experiments, we provide evidence that the hypostome, the apical part of the head, has the characteristics of an organizer in that it has the capacity to induce host tissue to form most of the second axis. By contrast, tissue of the body column has a self-organizing capacity, but not an inductive capacity. That the inductive capacity is confined to the hypostome is supported by experiments involving a hypostome-contact graft. The hypostome, but not the body column, transmits a signal(s) leading to the formation of a second axis. In addition, variations of the transplantation grafts and hypostome-contact grafts provide evidence for several characteristics of the organizer. The inductive capacity of the head and the self-organizing capacity of the body column are based on different pathways. Head inhibition, yya signal produced in the head and transmitted to the body column to prevent head formation, represses the effect of the inducing signal by interfering with formation of the hypostome/organizer. These results indicate that the organizer characteristics of the hypostome of an adult hydra are similar to those of the organizer region of vertebrate embryos. They also indicate that the Gierer-Meinhardt model provides a reasonable framework for the mechanisms that underlie the organizer and its activities. In addition, the results suggest that a region of an embryo or adult with the characteristics of an organizer arose early in metazoan evolution.