Summary The distinction between soma and germline is an important process in the development of animals with sexual reproduction. It is regulated by a number of germline-specific genes, most of which appear conserved in evolution and therefore can be used to study the formation of the germline in diverged animal groups. Here we report the isolation of two orthologs of one such gene, nanos (nos), in the cnidarian Podocoryne carnea, a species with representative zoological features among the hydrozoans. By studying nos gene expression throughout the Podocoryne biphasic life cycle, we find that the germline differentiates exclusively during medusa development, whereas the polyp does not contribute to the process. An early widespread nos expression in developing medusae progressively refines into a mainly germline-specific pattern at terminal stages of medusa formation. Thus, the distinction between germline and soma is a late event in hydrozoan development. Also, we show that the formation of the medusa is a de novo process that relies on active local cell proliferation and differentiation of novel cell and tissue types not present in the polyp, including nos-expressing cells. Finally, we find nos expression at the posterior pole of Podocoryne developing embryos, not related to germline formation. This second aspect of nos expression is also found in Drosophila, where nos functions as a posterior determinant essential for the formation of the fly abdomen. This raises the possibility that nos embryonic expression could play a role in establishing axial polarity in cnidarians.