Significance The larval imaginal discs of the fruit fly are capable of fully regenerating mechanically damaged parts. Wound healing is initiated by the JNK signaling pathway. We followed the subsequent formation of the regenerating blastema by transcriptome profiling and identified the JAK/STAT pathway as a central regulatory node controlling local cellular and global physiological responses. This signaling cascade induces, together with the Wingless pathway, proliferation of cells forming the blastema. However, JAK/STAT also up-regulates Drosophila insulin-like peptide 8 (Dilp8), a paracrine factor involved in organismal developmental delay, thereby allowing regenerative recovery.