Small non-coding RNAs such as miRNAs, piRNAs and endo-siRNAs fine-tune gene expression through post-transcriptional regulation, modulating important processes in development, differentiation, homeostasis and regeneration. Using deep sequencing, we have profiled small non-coding RNAs in Hydra magnipapillata and investigated changes in small RNA expression pattern during head regeneration. Our results reveal a unique repertoire of small RNAs in hydra. We have identified 126 miRNA loci; 123 of these miRNAs are unique to hydra. Less than 50% are conserved across two different strains of Hydra vulgaris tested in this study, indicating a highly diverse nature of hydra miRNAs in contrast to bilaterian miRNAs. We also identified siRNAs derived from precursors with perfect stem-loop structure and that arise from inverted repeats. piRNAs were the most abundant small RNAs in hydra, mapping to transposable elements, the annotated transcriptome and unique non-coding regions on the genome. piRNAs that map to transposable elements and the annotated transcriptome display a ping-pong signature. Further, we have identified several miRNAs and piRNAs whose expression is regulated during hydra head regeneration. Our study defines different classes of small RNAs in this cnidarian model system, which may play a role in orchestrating gene expression essential for hydra regeneration.