The embryonic chick has the ability to regenerate its retina after it has been completely removed. Here, we provide a detailed characterization of retina regeneration in the embryonic chick at the cellular level. Retina regeneration can occur in two distinct manners. The first is via transdifferentiation, which is induced by members of the Fibroblast growth factor (Fgf) family. The second type of retinal regeneration occurs from the anterior margin of the eye, near the ciliary body (CB) and ciliary marginal zone (CMZ). We show that regeneration from the CB/CMZ is the result of proliferating stem/progenitor cells. This type of regeneration is also stimulated by Fgf2, but we show that it can be activated by Sonic hedgehog (Shh) overexpression when no ectopic Fgf2 is present. Shh-stimulated activation of CB/CMZ regeneration is inhibited by the Fgf receptor (Fgfr) antagonist, PD173074. This indicates that Shh-induced regeneration acts through the Fgf signaling pathway. In addition, we show that the hedgehog (Hh) pathway plays a role in maintenance of the retina pigmented epithelium (RPE), as ectopic Shh expression inhibits transdifferentiation and Hh inhibition increases the transdifferentiation domain. Ectopic Shh expression in the regenerating retina also results in a decrease in the number of ganglion cells present and an increase in apoptosis mostly in the presumptive ganglion cell layer (GCL). However, Hh inhibition increases the number of ganglion cells but does not have an effect on cell death. Taken together, our results suggest that the hedgehog pathway is an important modulator of retina regeneration.