Full-thickness burns pose a major challenge for clinicians to handle because of their restricted self-healing ability. Even though several approaches have been implemented for repairing these burnt skin tissue defects, all of them had unsatisfactory outcomes. Moreover, during recent years, skin tissue engineering techniques have emerged as a promising approach to improve skin tissue regeneration and overcome the shortcomings of the traditional approaches. Although previous literatures report the wound healing effects of the squalene oil, in the current study, for the first time, we developed a squalene-loaded emulgel-based scaffold as a novel approach for potential skin regeneration. This squalene-loaded agar-based emulgel scaffold was fabricated by using physical cross-linking technique using lecithin as an emulsifier. Characterization studies such as X-ray diffraction, Fourier-transform infrared spectroscopy, and field emission scanning electron microscopy revealed the amorphous nature, chemical interactions, and cross-linked capabilities of the developed emulgel scaffold. The squalene-loaded emulgel scaffold showed excellent wound contraction when compared with the agar gel and negative control. In case of the histopathology and recent immunohistochemistry findings, it was clearly evidenced that squalene-loaded emulgel promoted faster rate of the revascularization and macrophage polarization in order to enhance the burn wound healing. Moreover, the findings also revealed that the incorporation of squalene oil into the formulation enhances collagen deposition and accelerates the burnt skin tissue regeneration process. Finally, we conclude that the squalene-loaded emulgel scaffold could be an effective formulation used in the treatment of the burnt skin tissue defects.