In this paper we reviewed and updated current views on the cellular and molecular mechanisms of gastric and esophageal ulcer healing. Gastric ulcer healing encompasses inflammation, cell proliferation, epithelial regeneration, gland reconstruction, formation of granulation tissue, neovascularization (new blood vessel formation), interactions between various cells and the matrix and tissue remodeling, resulting in scar formation. All these events are controlled by the cytokines and growth factors, GI hormones including gastrin, CCK, and orexigenic peptides such as ghrelin, orexin-A and obestatin as well as Cox2 generated prostaglandins. These growth factors and hormones trigger cell proliferation, migration, and survival utilizing Ras, MAPK, PI-3K/AKT, PLC-γ and Rho/Rac/actin signaling pathways. Hypoxia triggers activation of some of these genes (e.g., VEGF) via hypoxia inducible factor (HIF). Growth factors: EGF, HGF, IGF-1, their receptors and Cox2 are important for epithelial cell proliferation, migration, re-epithelialization and regeneration of gastric glands during gastric ulcer healing. Serum response factor (SRF) is also essential for re-epithelialization and muscle restoration. VEGF, bFGF, angiopoietins, nitric oxide, endothelin, prostaglandins and metalloproteinases are important for angiogenesis, vascular remodeling and mucosal regeneration within gastric ulcer scar. SRF is critical limiting factor for VEGF-induced angiogenesis. Esophageal ulcer healing follows similar pattern to gastric ulcer, but KGF and its receptor are the key players in regeneration of the epithelium. In addition to local mucosal cells from viable mucosa bordering necrosis, circulating bone marrow derived stem and progenitor cells are potentially important for ulcer healing, contributing to the regeneration of epithelial and connective tissue components and neovascularization.