Epithelial sheets, a synapomorphy of all metazoans but porifers, are present as two layers in cnidarians, ectoderm and endoderm, joined at their basal side by an extra-cellular matrix named mesoglea. In the Hydra polyp, epithelial cells of the body column are unipotent stem cells that continuously self-renew and concomitantly express their epitheliomuscular features. These multifunctional contractile cells maintain homeostasis by providing a protective physical barrier, by digesting nutrients, by selecting a stable microbiota, and by rapidly closing wounds. In addition, epithelial cells are highly plastic, supporting the adaptation of Hydra to physiological and environmental changes, such as long starvation periods where survival relies on a highly dynamic autophagy flux. Epithelial cells also play key roles in developmental processes as evidenced by the organizer activity they develop to promote budding and regeneration. We propose here an integrative view of the homeostatic and developmental aspects of epithelial plasticity in Hydra.