In a mutant strain of Hydractinia (Cnidaria: Hydrozoa), the polyps develop ectopic supernumerary tentacles and heads (hypostomes) after an initial phase of wild-type growth. In order to elucidate the molecular mechanisms implicated in the development of aberrant phenotypes, we tried to enhance or suppress the expressivity of this hypomorphic mutation by exposing subclones to factors supposedly influencing pattern formation. Upon iterated treatment with alsterpaullone, an inhibitor of GSK-3, the formation of additional, ectopic head structures and the budding of new polyps were dramatically accelerated and enhanced. The endogenous stolon-inducing factor (SIF) had opposite effects by reducing head forming potential while increasing stolon-forming potential. SIF could be used to rescue extremely aberrant phenotypes. In these mutant colonies, long polyps with multiple heads eventually detach from stolons and lose the ability to regenerate stolons. Upon exposure to SIF, such free-floating multi-headed polyps resumed production of stolons and acquired wild-type morphology. We conclude that a canonical WNT signaling cascade is involved in patterning the body axis of polyps and in the initiation of budding, and that SIF counteracts this signaling system.