In adult skin wounds, collagen expression rapidly re-establishes the skin barrier, although the resultant scar is aesthetically and functionally inferior to unwounded tissue. Although TGFβ signaling and fibroblasts are known to be responsible for scar-associated collagen production, there are currently no prophylactic treatments for scar management. Fibroblasts in crosstalk with wound keratinocytes orchestrate collagen expression, although the precise paracrine pathways involved remain poorly understood. Herein, we showed that the matricellular protein, angiopoietin-like 4 (ANGPTL4), accelerated wound closure and reduced collagen expression in diabetic and ANGPTL4-knockout mice. Similar observations were made in wild-type rat wounds. Using human fibroblasts as a preclinical model for mechanistic studies, we systematically elucidated that ANGPTL4 binds to cadherin-11, releasing membrane-bound β-catenin which translocate to the nucleus and transcriptionally upregulate the expression of Inhibitor of DNA-binding/differentiation protein 3 (ID3). ID3 interacts with scleraxis, a basic helix-loop-helix transcription factor, to inhibit scar-associated collagen types 1α2 and 3α1 production by fibroblasts. We also showed ANGPTL4 interaction with cadherin-11 in human scar tissue. Our findings highlight a central role for matricellular proteins such as ANGPTL4 in the attenuation of collagen expression and may have a broader implication for other fibrotic pathologies.