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In the course of systematic identification of peptide signaling molecules combined with the expressed sequence tag database from Hydra, we have identified a novel neuropeptide family that consists of two members with FRamide at the C-terminus; FRamide-1 (IPTGTLIFRamide) and FRamide-2 (APGSLLFRamide). The precursor sequence deduced from cDNA contained a single copy each of FRamide-1 and FRamide-2 precursor sequences. Expression analysis by whole-mount in situ hybridization showed that the gene was expressed in a subpopulation of neurons that were distributed throughout the body from tentacles to basal disk. Double in situ hybridization analysis showed that the expressing cell population was further subdivided into one population consisting of neurons expressing both the FRamide and Hym176 (neuropeptide) genes and the other consisting of neurons expressing only the FRamide gene. FRamide-1 evoked elongation of the body column of ‘epithelial’ Hydra that was composed of epithelial cells and gland cells but lacked all the cells in the interstitial stem cell lineage, including neurons. In contrast, FRamide-2 evoked body column contraction. These results suggest that both of the neuropeptides directly act on epithelial cells as neurotransmitters and regulate body movement in an axial direction.