Spermatogenesis in higher animals is a tightly regulated process, in which survival and death of sperm precursor cells depends on the presence of somatic cells in gonads. In the basal metazoan Hydra spermatogenesis takes place in anatomically simple testes and in the absence of accessory structures. Hydra sperm precursors are derived from interstitial stem cells. Here we show that large numbers of sperm precursors in testes of Hydra vulgaris undergo programmed cell death (apoptosis) and that ectodermal epithelial cells phagocytose the apoptotic sperm precursors. This is surprising since so far no evidence has been reported that epithelial cells are directly involved in germ cell differentiation in Hydra. We propose that, similar to Sertoli cells in mammals, in Hydra epithelial cells support and perhaps even control spermatogenesis.