Hym-301 is a peptide that was discovered as part of a project aimed at isolating novel peptides from hydra. We have isolated and characterized the gene Hym-301, which encodes this peptide. In an adult, the gene is expressed in the ectoderm of the tentacle zone and hypostome, but not in the tentacles. It is also expressed in the developing head during bud formation and head regeneration. Treatment of regenerating heads with the peptide resulted in an increase in the number of tentacles formed, while treatment with Hym-301 dsRNA resulted in a reduction of tentacles formed as the head developed during bud formation or head regeneration. The expression patterns plus these manipulations indicate the gene has a role in tentacle formation. Furthermore, treatment of epithelial animals indicates the gene directly affects the epithelial cells that form the tentacles. Raising the head activation gradient, a morphogenetic gradient that controls axial patterning in hydra, throughout the body column results in extending the range of Hym-301 expression down the body column. This indicates the range of expression of the gene appears to be controlled by this gradient. Thus, Hym-301 is involved in axial patterning in hydra, and specifically in the regulation of the number of tentacles formed.