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An animal’s ability to regrow lost tissues or structures can vary greatly during its life cycle. The annelid Capitella teleta exhibits posterior, but not anterior, regeneration as juveniles and adults. In contrast, embryos display only limited replacement of specific tissues. To investigate when during development C. teleta becomes capable of regeneration, we assessed the extent to which larvae can regenerate. We hypothesized that larvae exhibit intermediate regeneration potential and demonstrate some features of juvenile regeneration, but do not successfully replace all lost structures. Both anterior and posterior regeneration potential of larvae were evaluated following amputation. Wound sites were analyzed for re-epithelialization, cell proliferation by EdU incorporation, stem cell and differentiation marker expression by in situ hybridization, presence of neurites and muscle fibers by immunohistochemistry and phalloidin staining respectively, and regrowth of structures. Wound healing occurred within 6 hours of amputation for both anterior and posterior amputations. Cell proliferation at both wound sites was observed for up to 7 days following amputation. In addition, the stem cell marker vasa was expressed at anterior and posterior wound sites. However, growth of new tissue was observed only in posterior amputations. Neurites from the ventral nerve cord were also observed at posterior wound sites. De novo ash expression in the ectoderm of anterior wound sites indicated neuronal cell specification, although the absence of elav expression indicated an inability to progress to neuronal differentiation. In rare instances, cilia and eyes reformed. Both amputations induced expanded expression of the myogenesis gene MyoD in pre-existing tissues. Our results indicate that amputated larvae complete early, but not late, stages of regeneration, indicating a gradual acquisition of regenerative ability in C. teleta. Furthermore, amputated larvae can metamorphose into burrowing juveniles, including those missing brain and anterior sensory structures. To our knowledge, this is the first study to assess regenerative potential of annelid larvae.