More than 100 years ago, early workers realized that planarians offer an excellent system for regeneration studies. Another unique aspect of planarians is that they occupy an interesting phylogenetic position with respect to the nervous system in that they possess an evolutionarily primitive brain structure and can regenerate a functional brain from almost any tiny body fragment. Recent molecular studies have revisited planarian regeneration and revealed key information about the cellular and molecular mechanisms underlying brain regeneration in planarians. One of our great advances was identification of a gene, nou-darake, which directs the formation of a proper extrinsic environment for pluripotent stem cells to differentiate into brain cells in the planarian Dugesia japonica. Our recent findings have provided mechanistic insights into stem cell biology and also evolutionary biology.