In this paper, we study regenerator placement and traffic engineering of restorable paths in generalized multiprotocol label switching (GMPLS) networks. Regenerators are necessary in optical networks in order to cope with transmission impairments. We study a network architecture where regenerators are placed only at selected nodes for decreasing cost of regeneration. We propose two heuristic algorithms for optimum placement of these regenerators. Performances of these algorithms in terms of required number of regenerators and computational complexity are evaluated. In this network architecture with sparse regeneration, off-line computation of working and restoration paths is studied for traffic engineering with path rerouting as the restoration scheme. We study two approaches for selecting working and restoration paths from a set of candidate paths and formulate each method as an integer linear programming (ILP) problem. A traffic uncertainty model is developed in order to compare these methods based on their robustness with respect to changing traffic patterns. Traffic engineering methods are compared based on number of additional demands resulting from traffic uncertainties that can be carried over the network. Proposed heuristic regenerator placement algorithms are also evaluated from a traffic engineering point of view.