To understand the cellular parameters that govern Drosophila wing disc regeneration, we genetically eliminated specific stripes of the wing disc along the proximodistal axis and used vein and intervein markers to trace tissue regeneration. We found that veins could regenerate interveins and vice versa, indicating respecification of cell fates. Moreover, respecification occurred in cells close to the wound. The newly generated domains were intercalated to fill in the missing parts. This intercalation was driven by increased proliferation, accompanied by changes in the orientation of the cell divisions. This reorientation depended on Fat (Ft) and Crumbs (Crb), which acted, at least partly, to control the activity of the effector of the Hippo pathway, Yorkie (Yki). Increased Yki, which promotes proliferation, affected the final shape and size. Heterozygous ft or crb, which normally elicit size and shape defects in regenerated wings, could be rescued by yki heterozygosity. Thus, Ft and Crb act as sensors to drive cell orientation during intercalary regeneration and control Yki levels to ensure a proper balance between proliferation and cell reorientation. We propose a model based on intercalation of missing cell identities, in which a coordinated balance between orientation and proliferation is required for normal organ shape and size.