Regeneration capability varies in the phylum Annelida making them an excellent group to investigate the differences between closely related organisms. Several studies have described the process of regeneration, while the underlying molecular mechanism remains unclear, especially during the early stage (wound healing and blastema formation). In this study, the newly identified Ophryotrocha xiamen was used to explore the early regeneration. The detailed morphological and molecular analyses positioned O. xiamen within ‘labronica’ clade. We analyzed the morphological changes during regeneration process (0–3 days post amputation) and molecular changes during the early regeneration stage (1 day post amputation). Wound healing was achieved within one day and a blastema formed one day later. A total of 243 DEGs were mainly involved in metabolism and signal transduction. Currently known regeneration-related genes were identified in O. xiamen which could help with exploring the functions of genes involved in regeneration processes. According to their conserved motif, we identified 8 different Hox gene fragments and Hox5 and Lox2 were found to be absent in early regeneration and during regular growth. Our data can promote further use of O. xiamen which can be used as an experimental model for resolving crucial problems of developmental biology in marine invertebrates.