The developing fetus has the ability to heal wounds by regenerating normal epidermis and dermis with restoration of the extracellular matrix (ECM) architecture, strength, and function. In contrast, adult wounds heal with fibrosis and scar. Scar tissue remains weaker than normal skin with an altered ECM composition. Despite extensive investigation, the mechanism of fetal wound healing remains largely unknown. We do know that early in gestation, fetal skin is developing at a rapid pace and the ECM is a loose network facilitating cellular migration. Wounding in this unique environment triggers a complex cascade of tightly controlled events culminating in a scarless wound phenotype of fine reticular collagen and abundant hyaluronic acid. Comparison between postnatal and fetal wound healing has revealed differences in inflammatory response, cellular mediators, cytokines, growth factors, and ECM modulators. Investigation into cell signaling pathways and transcription factors has demonstrated differences in tyrosine phosphorylation patterns and homeobox gene expression. Further research may reveal novel genes essential to scarless repair that can be manipulated in the adult wound and thus ameliorate scar.