The first stem cells described in the biological literature were those of hydroid cnidarians; their detection by Weismann in 1883 gave rise to his germ line and "germ plasm" theory (with "germ plasm" meaning what is called genome today). Somatic cells preserving properties of eggs (called Stammzellen, i.e. stem cells, by him) were considered by him to be the cellular source of regeneration and reproduction. Weismann's studies have been the foundation of modern cnidarian stem cell research. In the latter, hydroid stem cells have been referred to as interstitial cells (shortly i-cells), and have mostly been studied in two cnidarian genera: the freshwater polyp Hydra and the colonial marine hydroid Hydractinia. In these animals, i-cells constitute a complex system of multipotent (in Hydra) or totipotent (in Hydractinia) stem cells and their derivatives. I-cells' potencies have been investigated by specific elimination of stem cells and reintroduction of i-cells from donors. The complement of stem cells confers potential immortality to the genetic individual. Cnidarians' cells in general have an unmatched capability of re- and transdifferentiation. Isolated, fully differentiated striated muscle cells of hydroid medusae may resume features of multipotent stem cells and give rise to almost all cell types including germ cells. Reverse development of adult stages back into juveniles is a further manifestation of cnidarian developmental plasticity. Typical i-cells have not been described in other cnidarian groups. In these taxa the source of new nematocytes nerve and germ cells may be differentiated cells that preserve plasticity. Following a historical perspective we review recent advances in hydroid i-cell research, and discuss the potential of invertebrate stem cell work.