Because the transcription factor Lef1 is important for development of several vertebrate organs but has not been investigated for involvement in epimorphic regeneration, we examined its expression during regeneration of amputated adult zebrafish caudal fins. We found that lef1 is markedly up-regulated in the newly formed wound epidermis of the fin regenerate and is maintained in the basal epidermal layer during formation of the regeneration blastema. During regenerative outgrowth, lef1 expression is strongest in epidermal cells adjacent to newly aligned scleroblasts that secrete bone matrix, while it is low or undetectable in epidermis adjacent to mesenchymal areas with either mature bone or proliferative distal blastema cells. This localization is similar to that of the putative fin ray patterning signal Shh. In addition, brief treatments of fin regenerates with retinoic acid or the synthetic Fgfr1 inhibitor SU5402 down-regulate epidermal lef1, similar to their effects on shh. These results suggest a role for Lef1 in scleroblast alignment analogous to that proposed for Shh. Other Wnt signaling pathway members wnt3a, wnt5, and beta-catenin are also expressed in the fin regenerate. Our data suggest that Lef1 has specific roles in inducing and patterning vertebrate regenerating tissue.