Fibrosis is one of the largest sources of human morbidity. The skin is a complex organ where interplay between diverse cell types and signalling pathways is essential both in homeostasis and wound repair, which can result in fibrosis or regeneration. This makes skin a useful model to study fibrosis and regeneration. While fibrosis often occurs postinjury, both clinical and laboratory observations suggest skin regeneration, complete with reconstituted cell diversity and de novo hair follicles, is possible.Extensive research performed in pursuit of skin regeneration has elucidated the key players, both cellular and molecular. Interestingly, some cells known for their homeostatic function are not implicated in regeneration or wound-induced hair neogenesis (WIHN), suggesting regeneration harnesses separate functional pathways from embryogenesis or other non-homeostatic mechanisms. For example, classic bulge cells, noted for their role in normally cycling hair follicles, do not finally contribute to long-lived cells in the regenerated tissue. During healing, multiple populations of cells, among them specific epithelial lineages, mesenchymal cells, and immune cells promote regenerative outcomes in the wounded skin. Ultimately, targeting specific populations of cells will be essential in manipulating a postwound environment to favour regeneration in lieu of fibrosis.