Cellular algebras have recently been introduced by Graham and Lehrer [5, 6] as a convenient axiomatization of all of the following algebras, each of them containing information on certain classical algebraic or finite groups: group algebras of symmetric groups in any characteristic, Hecke algebras of type A or B (or more generally, Ariki Koike algebras), Brauer algebras, Temperley–Lieb algebras, (q-)Schur algebras, and so on. The problem of determining a parameter set for, or even constructing bases of simple modules, is in this way reduced (but of course not solved in general) to questions of linear algebra.

The present paper has two aims. First, we make explicit an inductive construction of cellular algebras which has as input data of linear algebra, and which in fact produces all cellular algebras (but no other ones). This is what we call ‘inflation’. This construction also exhibits close relations between several of the above algebras, as can be seen from the computations in [6]. Among the consequences of the construction is a natural way of generalizing Hochschild cohomology. Another consequence is the construction of certain idempotents which is used in the second part of the paper.

The second aim is to study Morita equivalences of cellular algebras. Since the input of many of the constructions of representation theory of finite-dimensional algebras is a basic algebra, it is useful to know whether any finite-dimensional cellular algebra is Morita equivalent to a basic one by a Morita equivalence that preserves the cellular structure. It turns out that the answer is ‘yes’ if the underlying field has characteristic other than 2. However, there are counterexamples in the case of characteristic 2, or more generally for any ring in which 2 is not invertible. This also tells us that the notion of ‘cellular’ cannot be defined only in terms of the module category. However, in any characteristic we find some useful Morita equivalences which are compatible with cellular structures.