In the first-trimester mammalian fetus, skin wounds heal with perfect reconstitution of the dermal architecture without scar formation. Understanding environmental molecular regulation in fetal wound healing may reveal scar-limiting therapeutical strategies for the prevention of postnatal scarring wound repair. Therefore, we performed studies on fetal skin oxygenation and skin and wound expression of hypoxia-inducible factor 1alpha (HIF-1alpha) in the sheep model in vivo and performed studies on the potential relevance of HIF-1alpha during wound healing in vitro. Skin oxygen partial pressure levels were hypoxic throughout normal development. In nonscarring fetal skin at gestation day (GD)60, HIF-1alpha could be detected neither in healthy nor in wounded tissue. At GD100, in wounds with minimal scar formation, HIF-1alpha was expressed in fibroblasts and was markedly up-regulated at the wound edge. In scarring fetal wounds at GD120, HIF-1alpha was predominantly expressed in inflammatory cells. Expression of transforming growth factor beta3 (TGF-beta3), a potent antiscarring cytokine, overlapped with HIF-1a expression at GD100. HIF-1alpha-deficient mouse embryonic fibroblasts showed impaired migratory capabilities and demonstrated that TGF-beta3, but not proscarring TGF-beta1, manifests hypoxia- and HIF-1alpha-dependent regulation. In conclusion, HIF-1alpha-dependent regulation of a potent antiscarring cytokine may provide new strategies for antiscarring manipulation of wound healing.