Clinical observations and experimental data suggest that fetal wound healing is very different from adult wound healing. An understanding of the biology of scarless fetal wound healing has tremendous clinical potential for modulating postnatal wound problems. In this study, the fetal lamb model was used to assess excisional fetal skin wound contraction in utero. Full-thickness 9-mm punch biopsy wounds were created on fetal lambs at 100 days' gestation (term, 145 days). Half of the wounds remained exposed to amniotic fluid, whereas the other half were covered by a silastic patch to exclude amniotic fluid. Wounds were harvested 3, 7, or 14 days later and wound areas were calculated. Exposure to amniotic fluid retarded wound contraction significantly at 3 days, but by 14 days all wounds had completely contracted and reepithelialized. Myofibroblasts are an important cellular element of wound contraction. The presence of wound myofibroblasts was documented by both transmission electronmicroscopy and immunocytochemistry with antimuscle actin antibody. It is concluded that fetal lamb wounds contract in utero and exposure to amniotic fluid appears to retard fetal skin wound contraction only during the early healing process.