Origin and early evolution of regeneration mechanisms remain among the most pressing questions in animal regeneration biology. Porifera have exceptional regenerative capacities and, as early Metazoan lineage, are a promising model for studying evolutionary aspects of regeneration. Here, we focus on reparative regeneration of the body wall in the Mediterranean demosponge Aplysina cavernicola. The epithelialization of the wound surface is completed within 2 days, and the wound is completely healed within 2 weeks. The regeneration is accompanied with the formation of a mass of undifferentiated cells (blastema), which consists of archaeocytes, dedifferentiated choanocytes, anucleated amoebocytes, and differentiated spherulous cells. The main mechanisms of A. cavernicola regeneration are cell dedifferentiation with active migration and subsequent redifferentiation or transdifferentiation of polypotent cells through the mesenchymal‐to‐epithelial transformation. The main cell sources of the regeneration are archaeocytes and choanocytes. At early stages of the regeneration, the blastema almost devoid of cell proliferation, but after 24 hr postoperation (hpo) and up to 72 hpo numerous DNA‐synthesizing cells appear there. In contrast to intact tissues, where vast majority of DNA‐synthesizing cells are choanocytes, all 5‐ethynyl‐2′‐deoxyuridine‐labeled cells in the blastema are mesohyl cells. Intact tissues, distant from the wound, retains intact level of cell proliferation during whole regeneration process. For the first time, the apoptosis was studied during the regeneration of sponges. Two waves of apoptosis were detected during A. cavernicola regeneration: The first wave at 6–12 hpo and the second wave at 48–72 hpo.