Postburn hypertrophic scarring is a common complication in burn injuries to the hands, often associated with impaired hand function. We evaluated the effects of extracorporeal shock wave therapy (ESWT), compared to a sham stimulation therapy, on hypertrophic scars of the hand caused by burn injury and investigated its effects on hand function. This was a double-blinded, randomized, controlled trial of 48 patients with a burn to their dominant right hand. The parameters of ESWT were as follows: energy flux density, 0.05–0.30 mJ/mm2; frequency, 4 Hz; 1000 to 2000 impulses per treatment; four treatments, once a week for four weeks. The outcomes measured were as follows: a 10-point visual analogue scale pain score; Vancouver scar scale for scar vascularity, height, pliability and pigmentation; ultrasound measurement of scar thickness; Jebsen−Taylor hand function test; grip strength; Perdue pegboard test; and the Michigan hand outcomes questionnaire. The change in the score from baseline to post-treatment was compared between the two groups. ESWT improved the pain score (p = 0.001), scar thickness (p = 0.018), scar vascularity (p = 0.0015), and improved hand function (simulated card-turning, p = 0.02; picking up small objects, p = 0.004). The other measured outcomes were not different between the two groups. ESWT is effective in decreasing pain, suppressing hypertrophic scarring, and improving hand function.