Illumina 16S rRNA gene sequencing was used to profile the associated bacterial community of the marine hydroid Hydractinia echinata, a long-standing model system in developmental biology. 56 associated bacteria were isolated and evaluated for their antimicrobial activity. Three strains were selected for further in-depth chemical analysis leading to the identification of 17 natural products. Several γ-Proteobacteria were found to induce settlement of the motile larvae, but only six isolates induced the metamorphosis to the primary polyp stage within 24h. Our study paves the way to better understand how bacterial partners contribute to protection, homeostasis and propagation of the hydroid polyp.