___                   ___
   |   |                 |   |
    -> 1                  -> 1
       |   -transform->     / \
       2                   2   3
       |
       3

package de.idon;

import java.io.Serializable;
import java.util.ArrayList;
import java.util.List;

import javax.persistence.CascadeType;
import javax.persistence.Entity;
import javax.persistence.FetchType;
import javax.persistence.Id;
import javax.persistence.JoinColumn;
import javax.persistence.ManyToOne;
import javax.persistence.OneToMany;
import javax.persistence.Transient;

import org.hibernate.annotations.Cache;
import org.hibernate.annotations.CacheConcurrencyStrategy;
import org.hibernate.annotations.IndexColumn;

@Entity
@Cache(usage = CacheConcurrencyStrategy.READ_WRITE)
public class Node implements Serializable {

   private Integer id;
   
   private Node parentNode;
   private List<Node> subNodes = new ArrayList<Node>();

   public Node() {
   }

   public Node(int id) {
      setId(new Integer(id));
   }

   @Id
   public Integer getId() {
      return id;
   }

   public void setId(Integer id) {
      this.id = id;
   }

   @ManyToOne(fetch=FetchType.LAZY, optional=false)
   @JoinColumn(name="node_id", insertable=false, updatable=false, nullable=false)
   public Node getParentNode() {
      return parentNode;
   }

   public void setParentNode(Node parentNode) {
      this.parentNode = parentNode;
   }

   @OneToMany(cascade={CascadeType.ALL}, fetch=FetchType.LAZY)
   @JoinColumn(name="node_id", nullable=false)
   @IndexColumn(name = "idx")
   public List<Node> getSubNodes() {
      return subNodes;
   }

   public void setSubNodes(List<Node> subNodes) {
      this.subNodes = subNodes;
   }

   /**
    * Set the parentNode and modifies its subnodes.
    */
   @Transient
   public void setParent(Node parentNode) {
      setParentNode(parentNode);
      parentNode.getSubNodes().add(this);
   }
}

package de.idon;

import org.hibernate.Session;
import org.hibernate.SessionFactory;
import org.hibernate.cfg.AnnotationConfiguration;

public class Test {
   
    private static final SessionFactory sessionFactory;

    static {
        try {
            sessionFactory = new AnnotationConfiguration().configure().buildSessionFactory();
        } catch (Throwable ex) {
            throw new ExceptionInInitializerError(ex);
        }
    }

    public static void main( String[] args )
    {
        setup();
        transform();
        test();
       
        sessionFactory.close();
    }
   
   static void setup() {

      Session session = sessionFactory.getCurrentSession();
        session.beginTransaction();

        Node node1 = new Node(1);
        node1.setParent(node1);

        Node node2 = new Node(2);
        node2.setParent(node1);
       
        Node node3 = new Node(3);
        node3.setParent(node2);

        session.save(node1);

        session.getTransaction().commit();
    }

   static void transform() {
      
      Session session = sessionFactory.getCurrentSession();
        session.beginTransaction();
       
        Node node3 = (Node) session.load(Node.class, new Integer(3));
       
        Node node2 = node3.getParentNode();
      node2.getSubNodes().remove(node3);
        node3.setParent(node2.getParentNode());
       
        session.getTransaction().commit();
   }

   static void test() {

      Session session = sessionFactory.getCurrentSession();
        session.beginTransaction();
       
        Node node3 = (Node) session.load(Node.class, new Integer(3));
       
        System.out.println("node3.getParentNode: " + node3.getParentNode().getId() + " (should be 1)");
       
        session.getTransaction().commit();
   }
}

<?xml version='1.0' encoding='utf-8'?>
<!DOCTYPE hibernate-configuration PUBLIC
        "-//Hibernate/Hibernate Configuration DTD 3.0//EN"
        "http://hibernate.sourceforge.net/hibernate-configuration-3.0.dtd">

<hibernate-configuration>

    <session-factory>

        <!-- Database connection settings -->
        <property name="connection.driver_class">org.hsqldb.jdbcDriver</property>
        <property name="connection.url">jdbc:hsqldb:mem:test</property>
        <property name="connection.username">sa</property>
        <property name="connection.password"></property>

        <!-- JDBC connection pool (use the built-in) -->
        <property name="connection.pool_size">1</property>

        <!-- SQL dialect -->
        <property name="dialect">org.hibernate.dialect.HSQLDialect</property>

        <!-- Enable Hibernate's automatic session context management -->
        <property name="current_session_context_class">thread</property>

        <!-- Enable the second-level cache  -->
        <property name="cache.provider_class">org.hibernate.cache.EhCacheProvider</property>
      <property name="hibernate.cache.use_query_cache">true</property>
      <property name="hibernate.cache.use_second_level_cache">true</property>

        <!-- Echo all executed SQL to stdout -->
        <property name="show_sql">true</property>

        <!-- Drop and re-create the database schema on startup -->
        <property name="hbm2ddl.auto">create</property>

        <property name="jdbc.batch_size">0</property>

        <mapping class="de.idon.Node"/>

    </session-factory>

</hibernate-configuration>

@Cache(usage=CacheConcurrencyStrategy.READ_WRITE)