Animal development depends on cell communication by signals. We have investigated the role of signals and of signal transduction in the development of the marine hydroid Hydractinia echinata. The larvae undergo metamorphosis in response to a chemical signal provided by environmental bacteria. Metamorphosis can be induced by a variety of different compounds interfering with biochemical signal transduction pathways. Sectioned posterior parts cannot be induced by most compounds known to induce whole larvae to metamorphose. We identified a novel peptide, pGlu-Gln-Pro-Gly-Leu-TrpNH(2) (''metamorphosin A''), which induces isolated posterior parts to undergo metamorphosis and hence reactivates pattern formation, cell proliferation, cell differentiation, and morphogenesis. We suggest this peptide to be part of an internal signaling system involved in control of metamorphosis. (C) 1994 Academic Press, Inc.