The ability to repeatedly regenerate limbs during the entire lifespan of an animal is restricted to certain salamander species among vertebrates. This ability involves dedifferentiation of post-mitotic cells into progenitors that in turn form new structures. A long-term enigma has been how injury leads to dedifferentiation. Here we show that skeletal muscle dedifferentiation during newt limb regeneration depends on a programmed cell death response by myofibres. We find that programmed cell death-induced muscle fragmentation produces a population of 'undead' intermediate cells, which have the capacity to resume proliferation and contribute to muscle regeneration. We demonstrate the derivation of proliferating progeny from differentiated, multinucleated muscle cells by first inducing and subsequently intercepting a programmed cell death response. We conclude that cell survival may be manifested by the production of a dedifferentiated cell with broader potential and that the diversion of a programmed cell death response is an instrument to achieve dedifferentiation.