Animal development has traditionally been viewed as an autonomous process directed by the host genome. But in many animals biotic and abiotic cues, like temperature and bacterial colonizers, provide signals for multiple developmental steps. Hydra offers unique features to encode these complex interactions of developmental processes with biotic and abiotic factors. Here, we used the model animal Hydra to investigate the impact of bacterial colonizers and temperature on the pattern formation process. In Hydra, formation of the head organizer involves the canonical Wnt pathway. Treatment with alsterpaullone (ALP) results in acquiring characteristics of the head organizer in the body column. Intriguingly, germ-free Hydra polyps are significantly more sensitive to ALP compared to control polyps. In addition to microbes, β -catenin dependent pattern formation is also affected by temperature. Gene expression analyses led to the identification of two small secreted peptides, named Eco1 and Eco2, being upregulated in the response to both, Curvibacter sp, the main bacterial colonizer of Hydra, and low temperatures. Loss-of function experiments revealed that Eco peptides are involved in the regulation of pattern formation and have an antagonistic function to Wnt signaling in Hydra. Our results in an early branching metazoan suggest that the Wnt pathway evolved as a signaling hub integrating environmental signals, like bacterial signals and temperature, into developmental processes and stem cell behavior.