Degree of oxygenation is one of the important parameters governing various processes, including cell proliferation, angiogenesis, extracellular matrix production, and even combating the microbial burden at the wound site, all of which are essential for tissue function restoration and integrity. Inadequate oxygenation interrupts the normal healing process and delays patient recovery. The present article overviews the role of oxygen in the wound healing process and different oxygenation therapies that have been applied for healing dermal wounds. Furthermore, we critically assessed various challenges and opportunities in the near future for adequate and controlled oxygen delivery at the wounded site with minimal toxicity.