Hydra head formation depends on an organizing center in which Wnt/β-catenin signaling, that plays an inductive role, positively regulates Sp5 and Zic4, with Sp5 limiting Wnt3/β-catenin expression and Zic4 triggering tentacle formation. Using transgenic lines in which the HySp5 promoter drives eGFP expression in either the epidermis or gastrodermis, we show that Sp5 promoter activity is differentially regulated in each epithelial layer. In intact animals, epidermal HySp5:GFP activity is strong apically and weak along the body column, while in the gastrodermis, it is maximal in the tentacle ring region and maintained at a high level along the upper body column. During apical regeneration, HySp5:GFP is activated early in the gastrodermis and later in the epidermis. Alsterpaullone treatment induces a shift in apical HySp5:GFP expression towards the body column where it forms transient circular figures in the epidermis. Upon β-catenin(RNAi), HySp5:GFP activity is down-regulated in the epidermis while bud-like structures expressing HySp5:GFP in the gastrodermis develop. Sp5(RNAi) reveals a negative Sp5 autoregulation in the epidermis, but not in the gastrodermis. These differential regulations in the epidermis and gastrodermis highlight the distinct architectures of the Wnt/β-catenin/TCF/Sp5/Zic4 network in the hypostome, tentacle base and body column of intact animals, as well as in the buds and apical and basal regenerating tips.