The regenerating region of an amputated salamander limb, known as the blastema, has the amazing capacity to replace exactly the missing structures. By grafting cells from different stages and regions of blastemas induced to form on donor animals expressing Green Fluorescent Protein (GFP), to non-GFP host animals, we have determined that the cells from early stage blastemas, as well as cells at the tip of late stage blastemas are developmentally labile such that their positional identity is reprogrammed by interactions with more proximal cells with stable positional information. In contrast, cells from the adjacent, more proximal stump tissues as well as the basal region of late bud blastemas are positionally stable, and thus form ectopic limb structures when grafted. Finally, we have found that a nerve is required to maintain the blastema cells in a positionally labile state, thus indicating a role for reprogramming cues in the blastema microenvironment.