One of the major challenges in the field of regenerative medicine is how to optimize tissue regeneration in the body by therapeutically manipulating its natural ability to form scar at the time of injury or disease. It is often the balance between tissue regeneration, a process that is activated at the onset of disease, and scar formation, which develops as a result of the disease process that determines the ability of the tissue or organ to be functional. Using biomaterials as scaffolds often can provide a “bridge” for normal tissue edges to regenerate over small distances, usually up to 1 cm. Larger tissue defect gaps typically require both scaffolds and cells for normal tissue regeneration to occur without scar formation. Various strategies can help to modulate the scar response and can potentially enhance tissue regeneration. Understanding the mechanistic basis of such multivariate interactions as the scar microenvironment, the immune system, extracellular matrix, and inflammatory cytokines may enable the design of tissue engineering and wound healing strategies that directly modulate the healing response in a manner favorable to regeneration.