Axolotl limb regeneration is accompanied by the transient induction of cellular senescence within the blastema, the structure that nucleates regeneration. The precise role of this blastemal senescent cell (bSC) population, however, remains unknown. Here, through a combination of gain- and loss-of-function assays, we elucidate the functions and molecular features of cellular senescence in vivo. We demonstrate that cellular senescence plays a positive role during axolotl regeneration by creating a pro-proliferative niche that supports progenitor cell expansion and blastema outgrowth. Senescent cells impact their microenvironment via Wnt pathway modulation. Further, we identify a link between Wnt signaling and senescence induction and propose that bSC-derived Wnt signals facilitate the proliferation of neighboring cells in part by preventing their induction into senescence. This work defines the roles of cellular senescence in the regeneration of complex structures.