During appendage regeneration in urodeles and teleosts, tissue replacement is precisely regulated such that only the appropriate structures are recovered, a phenomenon referred to as positional memory. It is believed that there exists, or is quickly established after amputation, a dynamic gradient of positional information along the proximodistal (PD) axis of the appendage that assigns region-specific instructions to injured tissue. These instructions specify the amount of tissue to regenerate, as well as the rate at which regenerative growth is to occur. A striking theme among many species is that the rate of regeneration is more rapid in proximally amputated appendages compared with distal amputations. However, the underlying molecular regulation is unclear. Here, we identify position-dependent differences in the rate of growth during zebrafish caudal fin regeneration. These growth rates correlate with position-dependent differences in blastemal length, mitotic index and expression of the Fgf target genes mkp3, sef and spry4. To address whether PD differences in amounts of Fgf signaling are responsible for position-dependent blastemal function, we have generated transgenic fish in which Fgf receptor activity can be experimentally manipulated. We find that the level of Fgf signaling exhibits strict control over target gene expression, blastemal proliferation and regenerative growth rate. Our results demonstrate that Fgf signaling defines position-dependent blastemal properties and growth rates for the regenerating zebrafish appendage.