While considerable progress has been made towards understanding the complex processes and pathways that regulate human wound healing, regenerative medicine has been unable to develop therapies that coax the natural wound environment to heal scar-free. The inability to induce perfect skin regeneration stems partly from our limited understanding of how scar-free healing occurs in a natural setting. Here we have investigated the wound repair process in adult axolotls and demonstrate that they are capable of perfectly repairing full thickness excisional wounds made on the flank. In the context of mammalian wound repair, our findings reveal a substantial reduction in hemostasis, reduced neutrophil infiltration and a relatively long delay in production of new extracellular matrix (ECM) during scar-free healing. Additionally, we test the hypothesis that metamorphosis leads to scarring and instead show that terrestrial axolotls also heal scar-free, albeit at a slower rate. Analysis of newly forming dermal ECM suggests that low levels of fibronectin and high levels of tenascin-C promote regeneration in lieu of scarring. Lastly, a genetic analysis during wound healing comparing epidermis between aquatic and terrestrial axolotls suggests that matrix metalloproteinases may regulate the fibrotic response. Our findings outline a blueprint to understand the cellular and molecular mechanisms coordinating scar-free healing that will be useful towards elucidating new regenerative therapies targeting fibrosis and wound repair.