Mechanisms regulating the population size of the multipotent interstitial cell (i-cell) in Hydra attenuata were investigated. Treatment of animals with 3 cycles of a regime of 24 h in 10-2 M hydroxyurea (HU) alternated with 12 h in culture medium selectively killed 95-99% of the i-cells, but had little effect on the epithelial cells. The i-cell population recovered to the normal i-cell:epithelial cell ratio of I:I within 35 days. Continuous labelling experiments with [3H]thymidine indicate that the recovery of the i-cell population is not due to a change in the length of the cell cycle of either the epithelial cells or the interstitial cells. In control animals 60% of the i-cell population undergo division daily while 40% undergo differentiation. Quantification of the cell types of HU-treated animals indicates that a greater fraction of the i-cells were dividing and fewer differentiating into nematocytes during the first 2 weeks of the recovery after HU treatment. Therefore, the mechanism for recovery involves a shift of the 60:40 division:differentiation ratio of i-cells towards a higher fraction in division until the normal population size of the i-cells is regained. This homeostatic mechanism represents one of the influences affecting i-cell differentiation.