Even though corals and jellyfish look nothing alike, they are very closely related. They are both coelenterates. Jellyfish, sea anemones, and coral are all coelenterates. Coelenterates are a group of animals that have no brain, and for the most part, no backbone or skeleton and simply made up of nerves and muscles. Corals are the main exception. They have soft bodies that are protected by limestone which acts as an exoskeleton.
Coelenterates are carnivores, which means they eat meat. They use their stinging cells on their tentacles to paralyze microscopic animals found in water. These tentacles are covered with stinging cells that are tightly coiled stinging threads like tiny harpoons. Much like a bee's sting, once the stinging cells are injected into the prey, it will never be used again. Unlike bees, however, tentacles can grow new cells to replace the old ones. Jellyfish catch their prey differently. Some keep their bodies covered with a sticky substance that traps their prey when it comes in contact with it. Others rely on toxins in their tentacles to paralyze and kill prey.
Jellyfish release eggs into the ocean. These eggs then rest on rocks or seaweed. Rather than hatching into adult jellyfish, the eggs develop into a cone shape. Then, they start to split. Finally, each of them float away, transforming into a jellyfish with the water's current.
[Source: Kingfisher Children's Encyclopedia]