We have analyzed the cell cycle parameters of interstitial cells in Hydra oligactis. Three subpopulations of cells with short, medium, and long cell cycles were identified. Short-cycle cells are stem cells; medium-cycle cells are precursors to nematocyte differentiation; long-cycle cells are precursors to gamete differentiation. We have also determined the effect of different cell densities on the population doubling time, cell cycle length, and cell size of interstitial cells. Our results indicate that decreasing the interstitial cell density from 0.35 to 0.1 interstitial cells/epithelial cell (1) shortens the population doubling time from 4 to 1.8 days, (2) increases the [3H]thymidine labeling index from 0.5 to 0.75 and shifts the nuclear DNA distribution from G2 to S phase cells, and (3) decreases the length of G2 in stem cells from 6 to 3 hr. The shortened cell cycle is correlated with a significant decrease in the size of interstitial stem cells. Coincident with the shortened cell cycle and increased growth rate there is an increase in stem cell self-renewal and a decrease in stem cell differentiation.