The presence of Arg-Phe-amide (RFamide)-like peptides in dense-cored vesicles in neurons of the peduncle of Hydra was demonstrated by immunogold electron microscopy. Thin sections of Lowicryl-embedded tissue labeled with antisera to RFamide and 5-nm gold-conjugated, secondary antibody and of Epon-Araldite-embedded tissue labeled with 15-nm gold particles revealed a concentration of RFamide-like immunoreactivity over the granular cores of vesicles in epidermal ganglion cells. Gold-labeled, dense-cored vesicles were present in the perikaryon, long thin neurites, and axon terminals of these neurons. The aggregation of labeled dense-cored vesicles in an axon terminal on the myoneme of an epitheliomuscular cell suggests a possible function of RFamide-like peptides in neuromuscular transmission. Gold staining of dense-cored vesicles completely disappeared when the RFamide antiserum was preabsorbed with 10 micrograms/ml RFamide. These results are the first demonstration that the dense-cored vesicles of Hydra neurons contain a neuropeptide.