Using immunocytochemistry we find substance P-like material in nerve cells of hydra. These nerve cells are situated in the ectoderm of the basal disk and tentacles. Radioimmunoassay of hydra extracts gives dilution curves parallel to that of synthetic substance P, from which it can be calculated that one animal contains at least 0.6 fmol substance P-like immunoreactivity. After chromatography on Biogel P-100, the substance P-like immunoreactivity elutes as a peak in the void volume and a peak at the position of synthetic substance P.