Extensive scar tissue formation often occurs after severe burn injury, trauma, or as one of complications after surgical intervention. Despite significant therapeutic advances, it is still a significant challenge to manage massive scar tissue formation while also promoting normal wound healing. The goal of this study was to investigate the therapeutic effect of bone mesenchymal stem cells (BMSCs) that were genetically modified to overexpress transforming growth factor-beta 3 (TGF-β3), an inhibitor of myofibroblast proliferation and collagen type I deposition, on full-thickness cutaneous wound healing in a rabbit model. Twenty-four rabbits with surgically-induced full-thickness cutaneous wounds created on the external ear (1.5×1.5cm, two wounds/ear) were randomized into four groups: (G1), wounds with no special treatment but common serum-free culture medium as negative controls; (G2), topically-applied recombinant adenovirus, expressing TGF-β3/GFP; (G3), topically-applied BMSCs alone; (G4), topically-applied BMSCs transfected with Ad-TGF-β3/GFP (BMSCsTGF-β3); and (G5), an additional normal control (n= 2) with neither wound nor treatment on the external ear skin. The sizes of wounds on the ear tissues were grossly examined, and the scar depth and density of wounds were histologically evaluated 21, 45, and 90 days after surgical wound creation. Our results demonstrated that G4 significantly reduced the wound scar depth and density, compared to G1˜3. Numbers of cells expressing GFP significantly increased in G4, compared to G2. The protein expression of TGF-β3 and type III collagen in G4 significantly increased, while the ratio of type I to type III collagen was also significantly reduced, which is similar to the tissue architecture found in G5, as compared the other treatment groups. In conclusion, transplantation of BMSCsTGF-β3 remarkably improves wound healing and reduces skin scar tissue formation in an animal model, which may potentially provide an alternative in the treatment of extensive scar tissue formation after soft tissue injury.