Transposable elements (TEs) can damage genomes, thus organisms employ a variety of mechanisms to repress TE expression. The PIWI-piRNA pathway is a small RNA pathway that represses TE expression in the germline of animals. Here we explore the function of the pathway in the somatic stem cells of Hydra, a long-lived freshwater cnidarian. Hydra have three stem cell populations, all of which express PIWI proteins endodermal and ectodermal epithelial stem cells are somatic, whereas the interstitial stem cells have germline competence. To study somatic function of the pathway we isolated piRNAs from Hydra that lack the interstitial lineage and found that these somatic piRNAs map predominantly to TE transcripts and display the conserved sequence signatures typical of germline piRNAs. Three lines of evidence suggest that the PIWI-piRNA pathway represses TEs in Hydra epithelial stem cells. First, epithelial knockdown of the Hydra piwi gene hywi resulted in upregulation of TE expression. Second, degradome sequencing revealed evidence of PIWI-mediated cleavage of TE RNAs in epithelial cells using the ping-pong mechanism. Finally, we demonstrated a direct association between Hywi protein and TE transcripts in epithelial cells using RNA immunoprecipitation. Altogether, our data reveal that the PIWI-piRNA pathway represses TE expression in the somatic cell lineages of Hydra, which we propose contributes to the extreme longevity of the organism. Furthermore, our results, in combination with others, suggest that somatic TE repression is an ancestral function of the PIWI-piRNA pathway. Overall design: Differential gene expression analysis (mRNA-seq) comparing hywi knockdown and wildtype Hydra. Analysis of tissue/cell lineage specific piRNA expression. Degradome sequencing for homeostatic Hydra and epithelialized Hydra.