Individual Jellyfish are either male or female. The eggs and sperm develop in very colourful special areas called Gonads inside the body wall. When all of the eggs and sperm are fully developed, they are released into the stomach and then through the mouth into the sea. In most cases, to reproduce, a male releases his sperm into the surrounding water. The sperm then swims into the mouth of the female jellyfish, allowing the fertilization of the ova process to begin. Moon jellies, however, use a different process: their eggs become lodged in pits on the oral arms, which form a temporary brood chamber to accommodate fertilization. When the eggs are released into the sea they are fertilized by the sperm and continue to develop. As in all many-celled animals, the microscopic fertilized eggs begin a series of cell divisions which finally result in an embryo. However, the embryo does not develop directly into a baby jellyfish, but becomes a tiny, flattened creature called a Planula. for more information http://www.animalcorner.co.uk/marine/jellyfish/jellyfish_reproduction.html
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