The influence of the wound epithelium on the cellular events preceding blastema formation was examined by comparing dedifferentiation, DNA labeling indices, and mitotic indices of the distal mesodermal tissues in control regenerating newt forelimbs and in amputated forelimbs covered with a flap of full thickness skin. Three kinds of results were seen following the skin-flap graft operations. Epidermal migration across the amputation surface was completely inhibited in 22% (8) of the cases and these limbs repaired the amputation wound but did not form regeneration blastemas. In 11% (4) of the experimental limbs, essentially normal wound epithelia displaced the skin flaps and the limb stumps formed blastemas and regenerated. The majority of the skin grafts (67%) exhibited epidermal migration restricted to the free edges of the flaps. These limbs formed eccentric blastemas on the ventral side of the limb next to the dermis-free epidermis and regenerated laterally in that direction.