Experimental scale regeneration in fish is used as a means to study the epidermal‐dermal interactions controlling organogenesis. Scales and epidermis were removed from a large surface area (1 cm2) of the flank in the cichlid Hemichromis bimaculatus, and scale regeneration and restoration of the subepidermal tissues were studied using light and electron microscopy. In addition, cell proliferation in these regenerating dermal tissues was studied using tritiated thymidine incorporation. The original squamation pattern was entirely restored in the wound region, but a delay was observed in the central region compared to the peripheral regions in which normal regeneration had occurred. This delay was the consequence of the osmotic shock in wound regions that were exposed to the external environment for a long time because of the late covering of the wound by the healing epidermis. However, the osmotic shock was not as severe as expected because two means of protection of the skin are involved: the scale‐pocket lining (SPL) cells function as a barrier resisting the osmotic shock, and an exudate produced by the wounded tissues inhibits water penetration. Scale regeneration was initiated in each scale pocket where the healing epidermis entered in contact with the SPL cells, and it proceeded centripetally from the margins to the center of the wound, as did the healing of the epidermis. The shape and size of the regenerated scales reflected this centripetal re‐epithelialization, suggesting that the first signal for scale regeneration came from the epidermis. In the peripheral regions, which were rapidly protected from osmotic shock, the scales regenerated in a few days, whereas in the central regions, the dermis had to be restored before scales were able to regenerate, approximately 14 days after surgery. Healing of the dermis involved classical processes including migration, and proliferation of fibroblast cells, followed by extracellular matrix deposition (mainly collagen). The regenerated scales formed in the central region of the wound differed from normal in that new scale‐forming cells had to be recruited from the unwounded surrounding regions of the dermis, because of destruction of the SPL cell populations. J. Exp. Zool. 281:305–327, 1998. © 1998 Wiley‐Liss, Inc.