Significance: Cutaneous wound healing is a serious problem worldwide that affects patients with various wound types, resulting from burns, traumatic injuries, and diabetes. Despite the wide range of clinically available skin substitutes and the different therapeutic alternatives, delayed healing and scarring are often observed. Recent Advances: Stem cells have arisen as powerful tools to improve skin wound healing, due to features such as effective secretome, self-renewal, low immunogenicity, and differentiation capacity. They represent potentially readily available biological material that can particularly target distinct wound-healing phases. In this context, mesenchymal stem cells have been shown to promote cell migration, angiogenesis, and a possible regenerative rather than fibrotic microenvironment at the wound site, mainly through paracrine signaling with the surrounding cells/tissues. Critical Issues: Despite the current insights, there are still major hurdles to be overcome to achieve effective therapeutic effects. Limited engraftment and survival at the wound site are still major concerns, and alternative approaches to maximize stem cell potential are a major demand. Future Directions: This review emphasizes two main strategies that have been explored in this context. These comprise the exploration of hypoxic conditions to modulate stem cell secretome, and the use of adipose tissue stromal vascular fraction as a source of multiple cells, including stem cells and factors requiring minimal manipulation. Nonetheless, the attainment of these approaches to target successfully skin regeneration will be only evident after a significant number of in vivo works in relevant pre-clinical models.