Zebrafish fully regenerate lost bone, including after fin amputation, through a process mediated by dedifferentiated, lineage-restricted osteoblasts. Mechanisms controlling the osteoblast regenerative program from its initiation through reossification are poorly understood. We show that fin amputation induces a Wnt/β-catenin-dependent epithelial to mesenchymal transformation (EMT) of osteoblasts in order to generate proliferative Runx2+ preosteoblasts. Localized Wnt/β-catenin signaling maintains this progenitor population toward the distal tip of the regenerative blastema. As they become proximally displaced, preosteoblasts upregulate sp7 and subsequently mature into re-epithelialized Runx2/sp7+ osteoblasts that extend preexisting bone. Autocrine bone morphogenetic protein (BMP) signaling promotes osteoblast differentiation by activating sp7 expression and counters Wnt by inducing Dickkopf-related Wnt antagonists. As such, opposing activities of Wnt and BMP coordinate the simultaneous demand for growth and differentiation during bone regeneration. This hierarchical signaling network model provides a conceptual framework for understanding innate bone repair and regeneration mechanisms and rationally designing regenerative therapeutics.