NK-2-class homeobox genes have been identified in a variety of metazoans, from sponges to arthropods and vertebrates, and have been shown to play roles in a variety of cell and tissue specifications. Here we describe the characterization of the NK-2 homolog CnNK-2 from Hydra vulgaris, a freshwater cnidarian. CnNK-2 expression is restricted to the endodermal epithelial cells of hydra and is primarily in the peduncle, the lower end of the body column. In some species it is graded along the apical-basal axis with a maximum in the basal tissue of the lower peduncle, adjacent to the foot. CnNK-2 expression invariably precedes foot formation as part of the normal tissue dynamics of the adult as well as during asexual reproduction by budding, foot regeneration, or ectopic foot formation. Manipulations which alter the gradient of positional value along this axis affect CnNK-2 expression in a manner which indicates that expression of this gene is closely linked to the gradient. The normal and altered patterns of expression of this gene extend the understanding of the regulation of foot formation in hydra.