Epithelial repair relies on the activation of stress signaling pathways to coordinate tissue repair. Their deregulation is implicated in chronic wound and cancer pathologies. Using TNF-α/Eiger-mediated inflammatory damage toDrosophilaimaginal discs, we investigate how spatial patterns of signaling pathways and repair behaviors arise. We find that Eiger expression, which drives JNK/AP-1 signaling, transiently arrests proliferation of cells in the wound center and is associated with activation of a senescence program. This includes production of the mitogenic ligands of the Upd family, which allows JNK/AP-1-signaling cells to act as paracrine organizers of regeneration. Surprisingly, JNK/AP-1 cell-autonomously suppress activation of Upd signaling viaPtp61Fand Socs36E, both negative regulators of JAK/STAT signaling. As mitogenic JAK/STAT signaling is suppressed in JNK/AP-1-signaling cells at the center of tissue damage, compensatory proliferation occurs by paracrine activation of JAK/STAT in the wound periphery. Mathematical modelling suggests that cell-autonomous mutual repression between JNK/AP-1 and JAK/STAT is at the core of a regulatory network essential to spatially separate JNK/AP-1 and JAK/STAT signaling into bistable spatial domains associated with distinct cellular tasks. Such spatial stratification is essential for proper tissue repair, as coactivation of JNK/AP-1 and JAK/STAT in the same cells creates conflicting signals for cell cycle progression, leading to excess apoptosis of senescently stalled JNK/AP-1-signaling cells that organize the spatial field. Finally, we demonstrate that bistable separation of JNK/AP-1 and JAK/STAT drives bistable separation of senescent signaling and proliferative behaviors not only upon tissue damage, but also inRasV12,scribtumors. Revealing this previously uncharacterized regulatory network between JNK/AP-1, JAK/STAT, and associated cell behaviors has important implications for our conceptual understanding of tissue repair, chronic wound pathologies, and tumor microenvironments.