Planarians can undergo dramatic changes in body size and regenerate their entire body plan from small pieces after cutting. This remarkable morphological plasticity has made them an excellent model in which to analyze phenomena such as morphogenesis, restoration of pattern and polarity, control of tissue proportions and tissue homeostasis. They have a unique population of pluripotent stem cells in the adult that can give rise to all differentiated cell types, including the germ cells. These cellular characteristics provide an excellent opportunity to study the mechanisms involved in the maintenance and differentiation of cell populations in intact and regenerating animals. Until recently, the planarian model system lacked opportunities for genetic analysis; however, this handicap was overcome in the last decade through the development of new molecular methods which have been successfully applied to planarians. These techniques have allowed analysis of the temporal and spatial expression of genes, as well as interference with gene function, generating the first phenotypes by loss or gain of function. Finally, the sequencing of the planarian genome has provided the essential tools for an in-depth analysis of the genomic regulation of this model system. In this review, we provide an overview of planarians as a model system for research into development and regeneration and describe new lines of investigation in this area.