Regeneration following tissue damage often necessitates a mechanism for cellular re-programming, so that surviving cells can give rise to all cell types originally found in the damaged tissue. This process, if unchecked, can also generate cell types that are inappropriate for a given location. We conducted a screen for genes that negatively regulate the frequency of notum-to-wing transformations following genetic ablation and regeneration of the wing pouch, from which we identified mutations in the transcriptional co-repressor C-terminal Binding Protein (CtBP). When CtBP function is reduced, ablation of the pouch can activate the JNK/AP-1 and JAK/STAT pathways in the notum to destabilize cell fates. Ectopic expression of Wingless and Dilp8 precede the formation of the ectopic pouch, which is subsequently generated by recruitment of both anterior and posterior cells near the compartment boundary. Thus, CtBP stabilizes cell fates following damage by opposing the destabilizing effects of the JNK/AP-1 and JAK/STAT pathways.