Hydra tissue consists of the ectodermal and the endodermal layers. When the two layers were separated by procaine treatment and then recombined, the ectodermal epithelial cells spread as a single cell layer over the endoderm as in epiboly in vertebrate embryogenesis, and the resultant spherical structure subsequently regenerated into a complete hydra. In this study, light and electron microscopy were used to examine the structural changes which took place in the cells and tissue during this epibolic ectodermal spreading process. Within a few hours after tissue recombination, the endoderm underwent dramatic changes; it lost its epithelial sheet organization, and turned into a mass of irregularly shaped cells without the apical-basal cell polarity initially present. In contrast, the ectoderm maintained its basic epithelial sheet organization as it spread over the endoderm. Later, the endodermal epithelial cells reorganized themselves into a single-layered epithelial sheet underneath the spreading ectodermal layer. The resultant spherical structure consisted of a single layer of ectodermal epithelial cells outside, a single layer of endodermal epithelial cells inside, and an empty cavity in the center as in normal hydra tissue. This structure regenerated into hydra in the following days. These and other observations demonstrate that the two-layered epithelial sheet organization is highly dynamic, and that its stability is maintained by strong interactions between the two layers in normal hydra. It is suggested that this dynamic nature of the hydra tissue, particularly the high plasticity of the endodermal epithelial sheet organization, may be an important element for the high regenerative capacity of this organism.