Photobiomodulation (PBM) is a novel approach in regenerative medicine that utilizes red and near-infrared light to enhance wound healing and skin regeneration by regulating crucial cellular processes. This noninvasive therapy stimulates mitochondrial activity, balances reactive oxygen species, and regulates gene expression to increase fibroblast proliferation, angiogenesis, keratinocyte migration, and collagen remodeling. PBM’s applications range from faster recovery of patients with burns and diabetic ulcers to improved cosmetic outcomes through skin rejuvenation and reduced scarring. Unlike traditional treatments, PBM addresses the multifaceted challenges of wound healing, such as prolonged inflammation and suboptimal tissue repair, by simultaneously targeting multiple pathways. Despite its transformative potential, challenges remain, such as standardizing treatment protocols and refining mechanistic understanding. With the advancement of light delivery technologies and multimodal applications, PBM is poised to become a cornerstone therapy for enhancing tissue repair across diverse clinical settings. This review provides current insights into the mechanisms, therapeutic applications, and future directions of PBM, highlighting its integral role in advancing wound care and skin regeneration.