A systematic screening of peptide signaling molecules (<5000 da) in Hydra magnipapillata (the Hydra Peptide Project) was launched in 1993 and at least the first phase of the project ended in 2007. From the project a number of interesting suggestions and results have been obtained. First, a simple metazoan-like Hydra appears to contain a few hundred peptide signaling molecules: half of them neuropeptides and the rest epitheliopeptides that are produced by epithelial cells. Second, epitheliopeptides were identified for the first time in Hydra. Some exhibit morphogen-like activities, which accord with the notion that epithelial cells are primarily responsible for patterning in Hydra. A family of epitheliopeptides was involved in regulating neuron differentiation possibly through neuron–epithelial cell interaction. Third, many novel neuropeptides were identified. Most of them act directly on muscle cells inducing contraction or relaxation. Some were involved in cell differentiation and morphogenesis. During the course of this study, a number of important technical innovations (e.g. genetic manipulations in transgenic Hydra, high-throughput purification techniques, etc.) and expressed sequence tag (EST) and genome databases were introduced in Hydra research. They have already helped to identify and characterize novel peptides and will contribute even more to the Hydra Peptide Project in the near future.