Localized scleroderma is a chronic inflammatory disease primarily of the dermis and subcutaneous fat that ultimately leads to a scar-like sclerosis of connective tissue. The disorder manifests as various plaques of different shape and size with signs of skin inflammation, sclerosis, and atrophy. This is a relatively rare inflammatory disease characterized by a chronic course, unknown etiology, and insufficiently clear pathogenesis. Many factors may influence its appearance: trauma, genetic factors, disorders of the immune system or hormone metabolism, viral infections, toxic substances or pharmaceutical agents, neurogenic factors, and Borrelia burgdorferi infection. Various therapeutic modalities are being used for the treatment of localized scleroderma. There is no precise treatment scheme for this disease. A majority of patients can be successfully treated with topical pharmaceutical agents and phototherapy, but some of them with progressive, disseminated, and causing disability localized scleroderma are in need of systemic treatment. The aim of this article is not only to dispute about the clinical and morphological characteristics of localized scleroderma, but also to present the newest generalized data about the possible origin, pathogenesis, and treatment modalities of this disease.