Sponges are known to possess remarkable reconstitutive and regenerative abilities ranging from common wounding or body part regeneration to more impressive re-building of a functional body from dissociated cells. Among the four sponge classes, Homoscleromorpha is notably the only sponge group to possess morphologically distinct basement membrane and specialized cell-junctions, and is therefore considered to possess true epithelia. The consequence of this peculiar organization is the predominance of epithelial morphogenesis during ontogenesis of these sponges. In this work we reveal the underlying cellular mechanisms used during morphogenesis accompanying ectosome regeneration in the homoscleromorph sponge model: Oscarella lobularis. We identified three main sources of novel exopinacoderm during the processes of its regeneration and the restoration of functional peripheral parts of the aquiferous system in O. lobularis: (1) intact exopinacoderm surrounding the wound surface, (2) the endopinacoderm from peripheral exhalant and inhalant canals, and (3) the intact choanoderm found on the wound surface. The basic morphogenetic processes during regeneration are the spreading and fusion of epithelial sheets that merge into one continuous epithelium. Transdifferentiation of choanocytes into exopinacocytes is also present. Epithelial-mesenchymal transition is absent during regeneration. Moreover, we cannot reveal any other morphologically distinct pluripotent cells. In Oscarella, neither blastema formation nor local dedifferentiation and proliferation have been detected, which is probably due to the high morphogenetic plasticity of the tissue. Regeneration in O. lobularis goes through cell transdifferentiation and through the processes, when lost body parts are replaced by the remodeling of the remaining tissue. Morphogenesis during ectosome regeneration in O. lobularis is correlated with its true epithelial organization. Knowledge of the morphological basis of morphogenesis during Oscarella regeneration could have important implications for our understanding of the diversity and evolution of regeneration mechanisms in metazoans, and is a strong basis for future investigations with molecular-biological approaches.