Regeneration, the ability to replace lost tissues and body parts following traumatic injury, occurs widely throughout the animal tree of life. Regeneration occurs either by remodeling of pre-existing tissues, through addition of new cells by cell division, or a combination of both. We describe a staging system for posterior regeneration in the annelid, Capitella teleta, and use the C. teleta Hox gene code as markers of regional identity for regenerating tissue along the anterior-posterior axis. Following amputation of different posterior regions of the animal, a blastema forms and by two days, proliferating cells are detected by EdU incorporation, demonstrating that epimorphosis occurs during posterior regeneration of C. teleta. Neurites rapidly extend into the blastema, and gradually become organized into discrete nerves before new ganglia appear approximately seven days after amputation. In situ hybridization shows that seven of the ten Hox genes examined are expressed in the blastema, suggesting roles in patterning the newly forming tissue, although neither spatial nor temporal co-linearity was detected. We hypothesized that following amputation, Hox gene expression in pre-existing segments would be re-organized to scale, and the remaining fragment would express the complete suite of Hox genes. Surprisingly, most Hox genes display stable expression patterns in the ganglia of pre-existing tissue following amputation at multiple axial positions, indicating general stability of segmental identity. However, the three Hox genes, CapI-lox4, CapI-lox2 and CapI-Post2, each shift its anterior expression boundary by one segment, and each shift includes a subset of cells in the ganglia. This expression shift depends upon the axial position of the amputation. In C. teleta, thoracic segments exhibit stable positional identity with limited morphallaxis, in contrast with the extensive body remodeling that occurs during regeneration of some other annelids, planarians and acoel flatworms.