To explore the effect of placenta-derived mesenchymal stem cells on scar formation as well as the underlying mechanism. The isolated placenta-derived mesenchymal stem cells from mice were distributed in the wounded areas of scalded mouse models, attenuated inflammatory responses and decreased the deposition of collagens, thus performing a beneficial effect against scar formation. Hypoxia enhanced the protective effect of placenta-derived mesenchymal stem cells and hypoxia-inducible factor-1 alpha was involved in the protective effect of placenta-derived mesenchymal stem cells in hypoxic condition. Hypoxia enhanced the protective effect of placenta-derived mesenchymal stem cells through hypoxia-inducible factor-1 alpha and PMSCs may have a potential application in the treatment of wound.