Cnidarians, in contrast with bilaterians, are generally considered to exhibit radial symmetry around a single body axis (oral-aboral) throughout their life-cycles. We have investigated how the oral-aboral axis is established in the hydrozoan jellyfish Podocoryne carnea. Vital labeling experiments showed that the oral end of the blastula derives from the animal pole region of the egg as has been demonstrated for other cnidarian species. Gastrulation is restricted to the oral pole such that the oral 20% of blastula cells give rise to endoderm. Unexpectedly, bisection experiments at the 8-cell stage showed that animal regions are able to develop into normally polarized larvae, but that vegetal (aboral) blastomeres completely fail to develop endoderm or to elongate. These vegetal-derived larvae also failed to polarize, as indicated by a lack of oral-specific RFamide-positive nerve cells and a disorganized tyrosinated tubulin-positive nerve net. A different result was obtained following bisection of the late blastula stage: aboral halves still lacked the capacity to develop endoderm but retained features of axial polarity including elongation of the larva and directional swimming. These results demonstrate for the first time in a cnidarian the presence of localized determinants responsible for axis determination and endoderm formation at the animal pole of the egg. They also show that axial polarity and endoderm formation are controlled by separable pathways after the blastula stage.