Chimaeric hydra strains were produced from a normal strain (105) and a naturally-occurring mutant strain (L4) which has a large polyp size, a low budding rate and a high head-inhibition potential. Various properties of the chimaeras were then examined and compared to those of the two parental strains. Hydra tissue consists of three cell lineages: the ectodermal epithelial, the endodermal epithelial and the interstitial cell lineages. Using the methods recently developed by Marcum & Campbell (1978b) and by Wanek & Campbell (1982), six chimaeric strains were produced which contained six different combinations of the three cell lineages from 105 and L4. Evidence obtained from the comparison of the chimaeras and their parental strains indicates that the ectodermal epithelial cell lineage in L4 is primarily responsible for the large polyp size and the low budding rate of this strain, whereas the endodermal epithelial cell lineage is largely, and the interstitial cell lineage is also partially, responsible for the high head-inhibition potential in L4. This suggests that the mechanisms determining the occurrence and location of bud formation and the mechanisms determining the inhibition potential levels are not related to each other (cf. Takano & Sugiyama, 1983; Bode & Bode, 1983). Evidence was also obtained which suggests that the levels of the head-activation and head-inhibition potentials in the chimaeras are determined independent of each other, apparently without the cross-catalytic relationship between them assumed in the Gierer-Meinhardt model (Gierer & Meinhardt, 1972; Meinhardt & Gierer, 1974).