Quantum field theories require a cutoff to regulate divergences that result from local interactions, and yet physical results can not depend on the value of this cutoff. The renormalization group employs a transformation that changes the cutoff to isolate hamiltonians that produce cutoff-independent eigenvalues. The similarity renormalization group is based on similarity transformations that regulate off-diagonal matrix elements, forcing the hamiltonian towards a band-diagonal form as the cutoff is lowered. This avoids pathologies that plagued tradition transformations acting on hamiltonians, making it possible to produce a well-behaved perturbative approximation of renormalized hamiltonians in asymptotically free theories. We employ a simple two-dimensional delta function example to illustrate this new renormalization technique.