The neuropeptide head activator plays an important role for proliferation and determination of stem cells in hydra. By affinity chromatography a 200 kDa head-activator binding protein, HAB, was isolated from the multiheaded mutant of Chlorohydra viridissima. Partial amino acid sequences were used to clone the HAB cDNA which coded for a receptor with a unique alignment of extracellular modules, a transmembrane domain, and a short carboxy-terminal cytoplasmic tail. A mammalian HAB homologue with identical alignment of these modules is expressed early in brain development. Specific antibodies revealed the presence of HAB in hydra as a transmembrane receptor, but also as secreted protein, both capable of binding head activator. Secretion of HAB during regeneration and expression in regions of high determination potential hint at a role for HAB in regulating the concentration and range of action of head activator.