With the explosive growth of demand for services on the Internet, the networking infrastructure (routers, protocols, servers) is under considerable stress. Mechanisms are needed for current and future IP services to scale in a client-transparent way. We present HYDRANET, an infrastructure that allows to dynamically distribute IP services by placing service agents (caching agents, mirrors, replicas) that are under the server's control at strategic points in the internetwork. HYDRANET is based on replicating transport-level service access points for transparent distribution or replication of IP services. Measurements on a local testbed show that the overhead of our scheme is small. This replication scheme is widely applicable. We use HYDRANET to implement HYDRAWEB, a system for active, push based, and client-transparent Web caching. Similarly, HYDRANET can be used to implement highly fault-tolerant servers or application-level gateways.