The limb blastemal cells of an adult salamander regenerate the structures distal to the level of amputation, and the surface protein Prod 1 is a critical determinant of their proximodistal identity. The anterior gradient protein family member nAG is a secreted ligand for Prod 1 and a growth factor for cultured newt blastemal cells. nAG is sequentially expressed after amputation in the regenerating nerve and the wound epidermis-the key tissues of the stem cell niche-and its expression in both locations is abrogated by denervation. The local expression of nAG after electroporation is sufficient to rescue a denervated blastema and regenerate the distal structures. Our analysis brings together the positional identity of the blastema and the classical nerve dependence of limb regeneration.