The planarian Schmidtea mediterranea is a powerful model organism for studying stem cell biology due to its extraordinary regenerative ability mediated by neoblasts, a population of adult somatic stem cells. Elucidation of the S. mediterranea transcriptome and the dynamics of transcript expression will increase our understanding of the gene regulatory programs that regulate stem cell function and differentiation. Here, we have used RNA-Seq to characterize the S. mediterranea transcriptome in sexual and asexual animals and in purified neoblast and differentiated cell populations. Our analysis identified many uncharacterized genes, transcripts, and alternatively spliced isoforms that are differentially expressed in a strain or cell type-specific manner. Transcriptome profiling of purified neoblasts and differentiated cells identified neoblast-enriched transcripts, many of which likely play important roles in regeneration and stem cell function. Strikingly, many of the neoblast-enriched genes are orthologs of genes whose expression is enriched in human embryonic stem cells, suggesting that a core set of genes that regulate stem cell function are conserved across metazoan species.