An important unanswered question in regenerative biology is to what extent regeneration is accomplished by the reactivation of gene regulatory networks used during development versus the activation of regeneration-specific transcriptional programs. Following damage, Drosophila imaginal discs, the larval precursors of adult structures, can regenerate missing portions by localized proliferation of damage-adjacent tissue. Using single-cell transcriptomics in regenerating wing discs, we have obtained a comprehensive view of the transcriptome of regenerating discs and identified two regeneration-specific cell populations within the blastema, Blastema1 and Blastema2. Collectively, these cells upregulate multiple genes encoding secreted proteins that promote regeneration including Pvf1, upd3, asperous, Mmp1, and the maturation delaying factor Ilp8. Expression of the transcription factor Ets21C is restricted to this regenerative secretory zone; it is not expressed in undamaged discs. Ets21C expression is activated by the JNK/AP-1 pathway, and it can function in a type 1 coherent feedforward loop with AP-1 to sustain expression of downstream genes. Without Ets21C function, the blastema cells fail to maintain the expression of a number of genes, which leads to premature differentiation and severely compromised regeneration. As Ets21C is dispensable for normal development, these observations indicate that Ets21C orchestrates a regeneration-specific gene regulatory network. We have also identified cells resembling both Blastema1 and Blastema2 in scribble tumorous discs. They express the Ets21C-dependent gene regulatory network, and eliminating Ets21C function reduces tumorous growth. Thus, mechanisms that function during regeneration can be co-opted by tumors to promote aberrant growth.