Tumour necrosis factor receptors (TNF-Rs) and their ligands, tumour necrosis factors, are highly conserved proteins described in all metazoan phyla. They function as inducers of extrinsic apoptotic signalling and facilitate inflammation, differentiation and cell survival. TNF-Rs use distinct adaptor molecules to activate signalling cascades. Fas-associated protein with death domain (FADD) family adaptors often mediate apoptosis, and TNF-R-associated factor (TRAF) family adaptors mediate cell differentiation and inflammation. Most of these pathway components are conserved in cnidarians, and, here, we investigated the Hydra TNF-R. We report that it is related to the ectodysplasin receptor, which is involved in epithelial cell differentiation in mammals. In Hydra, it is localised in epithelial cells with incorporated nematocytes in tentacles and body column, indicating a similar function. Further experiments suggest that it interacts with the Hydra homologue of a TRAF adaptor, but not with FADD proteins. Hydra FADD proteins colocalised with Hydra caspases in death effector filaments and recruited caspases, suggesting that they are part of an apoptotic signalling pathway. Regulating epithelial cell differentiation via TRAF adaptors therefore seems to be an ancient function of TNF-Rs, whereas FADD-caspase interactions may be part of a separate apoptotic pathway.