Hydra extracellular matrix (ECM) is composed of a number of components seen in vertebrate ECM such as laminin, type IV collagen, fibronectin, and heparan sulfate proteoglycan. A number of functional studies have shown that hydra ECM plays an important role in pattern formation and morphogenesis of this simple metazoan. The present study was designed to identify matrix degrading proteinases in hydra and determine their potential function in hydra morphogenesis. Using SDS-PAGE gelatin-zymography, five gelatinolytic bands were identified with relative molecular masses of 67 x 10(3), 51-58 x 10(3) (a triplet) and 25-29 x 10(3), respectively. Inhibition studies indicated that all of these gelatinases were metalloproteinases. Gelatin-zymography indicated that there was a differential distribution of these gelatinases along the longitudinal axis of hydra, with the 67 x 10(3) M(r) gelatinase being concentrated in the body column, while the 51-58 x 10(3) M(r) gelatinase triplet and the 25-29 x 10(3) M(r) gelatinase concentrated in the head region. Purification procedures were successfully developed for the 25-29 x 10(3) M(r) metalloproteinase which has been termed hydra metalloproteinase 1 (HMP1) and which appeared as a single band with a SDS-PAGE mobility of 25.7 x 10(3) M(r). The N-terminal sequence of purified HMP1 indicated that it has structural homology with metalloproteinases that belong to the astacin family. Subsequent cloning and sequencing of cDNA clones confirmed the identification of HMP1 as an astacin-like metalloproteinase. Immunocytochemical studies with antibodies generated against the purified enzyme and to a synthetic peptide indicated that HMP1 was localized to the ECM of tentacles. Functional studies were performed in which purified HMP1, anti-HMP1 IgG, or suspected substrates of HMP1 (e.g. growth factors such as TGF-beta 1) were introduced into the interepithelial compartment of hydra using a 'DMSO loading' procedure. These studies indicated that HMP1 has a functional role during a number of developmental processes such as head regeneration and cell differentiation/transdifferentiation of tentacle battery cells.