Excess scar formation occurs after dermal injury as a result of abnormal wound healing. Hypertrophic scars and keloids both represent fibrotic skin conditions which can be very difficult, even frustrating, to treat. Identification of differences between hypertrophic scars, keloids and normal scars are a prerequisite for finding the correct therapeutical concept. Despite the relatively high prevalence of keloids in the general population, the mechanisms underlying keloid formation are only partially understood. This fact is reflected in the multiple treatment modalities, of which no single treatment has proven to be widely effective. Advances in our understanding of the wound healing process reveal new pathophysiological concepts for keloid formation. Our article presents an overview on physiological wound healing and the pathogenesis of scar formation, differentiates keloids from hypertrophic scars and reviews current hypotheses for keloid formation. This information might assist in deciphering the complexity of keloid pathogenesis and help in the development of an efficacious therapeutical strategy.