Here, we used classical genetics in zebrafish to identify temperature-sensitive mutants in caudal fin regeneration. Gross morphological, histological, and molecular analyses revealed that one of these strains, emmental (emm), failed to form a functional regeneration blastema. Inhibition of emm function by heat treatment during regenerative outgrowth rapidly blocked regeneration. This block was associated with reduced proliferation in the proximal blastema and expansion of the nonproliferative distal blastemal zone. Positional cloning revealed that the emm phenotype is caused by a mutation in the orthologue of yeast sly1, a gene product involved in protein trafficking. sly1 is upregulated in the newly formed blastema as well as during regenerative outgrowth. Thus, sly1 is essential for blastemal organization and proliferation during two stages of fin regeneration.