Localized scleroderma refers to a diverse spectrum of disorders that involve fibrosis of the skin. Children are more likely than adults to develop localized forms of scleroderma. This condition may have devastating effects on growth and development such as limb asymmetry, flexion contractures, and psychological disability. The pathogenesis of localized scleroderma is unknown but its possible relation to Borrelial infection is discussed. This article reviews associated laboratory and radiologic abnormalities, and discusses implications for monitoring disease activity. There is no universally effective therapy for this idiopathic condition and therapy is limited. A rationale for treatment based on disease subtype and severity is provided.