In Hydra, developmental processes are permanently active to maintain a simple body plan consisting of a two-layered, radially symmetrical tube with two differentiated structures, head and foot. Foot formation is a dynamic process and includes terminal differentiation of gastric epithelial cells into mucous secreting basal disc cells. A well-established marker for this highly specialized cell type is a locally expressed peroxidase (Hoffmeister et al. 1985). Based on the foot-specific peroxidase activity, the gene PPOD1 has been identified (Hoffmeister-Ullerich et al. 2002). Unexpectedly, this approach led to the identification of a second gene, PPOD2, with high sequence similarity to PPOD1 but a strikingly different expression pattern. Here, we characterize PPOD2 in more detail and show that both genes, PPOD1 and PPOD2, are members of a gene family with differential complexity and expression patterns in different Hydra species. At the genomic level, differences in gene number and structure within the PPOD gene family, even among closely related species, support a recently proposed phylogeny of the genus Hydra and point to unexpected genomic plasticity within closely related species of this ancient metazoan taxon.