The process by which sperm are produced is called spermatogenesis. Spermatozoa are formed on the upper side of the hydra’s body. The interstitial cells of the testis divide repeatedly in the process of mitosis to form spermatogonia. Each spermatogonia enlarges in size by taking food and develops into spermatocytes. Each spermatocyte divides by meiosis to produce 4 spermatids. Each spermatid is transformed into a sperm in the process of spermiogenesis.