The method by which Hydra reproduces is called budding.

Budding is an asexual method.

A new bud grows out of the side of the body of the Hydra and this new bud is formed by repeated mitotic divisions of the cells. This is nourished with food from its parent. The bud grows to form a new Hydra with mouth and tentacles and eventually it breaks away from the parental Hydra forming an independent Hydra.