Planarian flatworms can regenerate heads at anterior-facing wounds and tails at posterior-facing wounds throughout the body. How this regeneration polarity is specified has been a classic problem for more than a century. We identified a planarian gene, Smed-betacatenin-1, that controls regeneration polarity. Posterior-facing blastemas regenerate a head instead of a tail in Smed-betacatenin-1(RNAi) animals. Smed-betacatenin-1 is required after wounding and at any posterior-facing wound for polarity. Additionally, intact Smed-betacatenin-1(RNAi) animals display anteriorization during tissue turnover. Five Wnt genes and a secreted Frizzled-related Wnt antagonist-like gene are expressed in domains along the anteroposterior axis that reset to new positions during regeneration, which suggests that Wnts control polarity through Smed-betacatenin-1. Our data suggest that beta-catenin specifies the posterior character of the anteroposterior axis throughout the Bilateria and specifies regeneration polarity in planarians.