Medusae buds ofPodocoryne carnea up to the stage 8-9 (see Frey, 1968 for description of stages) are able to dedifferentiate and form stolos and polyps. Isolated buds of stages 9 and 10 always develop to medusae. 2. Repeated traumatisation of the isolated buds greatly increases the rate of dedifferentiation of the stages 1-8. 3. The rate of dedifferentiation is clone-specific. 4. In the critical stage 8-9, after which no dedifferentiation is possible, the structural differentiation of medusae-cells is completed and there is little mitotic activity. 5. The loss of capability for dedifferentiation is correlated with the swelling of the outer mesoglea. 6. Cell-aggregates of dissociated buds behave morphogenetically similar to isolated intact medusae-buds. 7. Medusae fragments of the umbrella, which are free of interstitial cells, transform in a process of metaplasia into stolos and polyps. 8. Dedifferentiation starts with the subumbrellar muscular system and later involves the subumbrellar sheet with the radial canals. The discussion of the transformation of musclecells into entoderm-cells is based on electron-optical investigations.