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Blastema formation is a crucial process that provides a cellular source for regenerating tissues and organs. While bilaterians have diversified blastema formation methods, its mechanisms in non-bilaterians remain poorly understood. Cnidarian jellyfish, or medusae, represent early-branching metazoans that exhibit complex morphology and possess defined appendage structures highlighted by tentacles with stinging cells (nematocytes). Here, we investigate the mechanisms of tentacle regeneration, using the hydrozoan jellyfish Cladonema pacificum. We show that proliferative cells accumulate at the tentacle amputation site and form a blastema composed of cells with stem cell morphology. Nucleoside pulse-chase experiments indicate that most repair-specific proliferative cells (RSPCs) in the blastema are distinct from resident stem cells. We further demonstrate that resident stem cells control nematogenesis and tentacle elongation during both homeostasis and regeneration as homeostatic stem cells, while RSPCs preferentially differentiate into epithelial cells in the newly formed tentacle, analogous to lineage-restricted stem/progenitor cells observed in salamander limbs. Taken together, our findings propose a regeneration mechanism that utilizes both resident homeostatic stem cells (RHSCs) and RSPCs, which in conjunction efficiently enable functional appendage regeneration, and provide novel insight into the diversification of blastema formation across animal evolution. Jellyfish are known for their remarkable regenerative abilities. This study shows that in the jellyfish Cladonema, following tentacle amputation, repair-specific proliferating cells robustly form a blastema with stem-like properties; these are distinct from resident stem cells and have a preference for differentiating into epithelial cells. [ABSTRACT FROM AUTHOR]