Early in gestation, fetal wounds are capable of healing scarlessly. Scarless healing in the fetus is characterized by regeneration of an organized dermis with normal appendages and by a relative lack of inflammation. Although there is a transition period between scarless and scar-forming repair, scarless healing also depends on wound size and the organ involved. The ability to heal scarlessly, furthermore, appears to be intrinsic to fetal skin. Unique characteristics of fetal fibroblasts, inflammatory cells, extra-cellular matrix, cytokine profile, and developmental gene regulation may be responsible for the scarless phenotype of early gestation fetal wounds. With the current knowledge, only minimal success has been achieved with the topical application of neutralizing antibodies, antisense oligonucleotides, and growth factors to improve wound-healing outcomes. Thus, further investigation into the mechanisms underlying scarless repair is crucial in order to devise more effective therapies for scar reduction and the treatment of cirrhosis, scleroderma, and other diseases of excessive fibrosis.