A creature with this ability may try to regenerate any wound on a D6 roll of 4+. Only one attempt may be made on each wound to regenerate it.
Troops that are able to can regenerate damage if not too badly hurt. Work this out as follows. When attacked in close combat, shot at, or the target of spells, calculate the number of wounds suffered as normal. Once all attacks for the phase have been made, the creature may try to regenerate. Roll a D6 for each wound suffered during that phase. If a 4 or more is rolled, that wound has regenerated. You may only try to regenerate any single wound once. Any regenerated wounds are reinstated, and models removed as casualties are replaced if enough wounds are regenerated.
The results of combat, panic, etc are worked out after creatures have regenerated (the number of wounds inflicted does not include any that are regenerated).
For example, three Trolls (which can regenerate) are fighting five Empire Knights. The Knights strike first and inflict 5 wounds, enough to kill one Troll and cause 2 further wounds. The remaining two Trolls inflict 3 wounds on the Knights. The Trolls now test to regenerate and successfully regenerate 3 wounds. The 3 wounds are reinstated, the 'killed' Troll is replaced, and the 2 wounds suffered are noted down. The Knights have scored only 2 wounds in the end while the Trolls have inflicted 3. Assuming no other combat bonuses apply, the Trolls have won.
Fire
The flesh of a regenerating creature cannot regenerate if it has been burnt. If a regenerating creature or unit sustains one or more wounds from a flame attack it cannot regenerate any wounds during the remainder of the battle, not even those inflicted by ordinary weapons.
Note: In Warhammer Chronicles 2004, page 114 it was clarified Regeneration has no effect on successful Killing Blows.