Proteinases play a pivotal role in wound healing by regulating cell-matrix interactions and availability of bioactive molecules. The role of matrix metalloproteinase-13 (MMP-13) in granulation tissue growth was studied in subcutaneously implanted viscose cellulose sponge in MMP-13 knockout (Mmp13^−/−) and wild type (WT) mice. The tissue samples were harvested at time points day 7, 14 and 21 and subjected to histological analysis and gene expression profiling. Granulation tissue growth was significantly reduced (42%) at day 21 in Mmp13^−/− mice. Granulation tissue in Mmp13^−/− mice showed delayed organization of myofibroblasts, increased microvascular density at day 14, and virtual absence of large vessels at day 21. Gene expression profiling identified differentially expressed genes in Mmp13^−/− mouse granulation tissue involved in biological functions including inflammatory response, angiogenesis, cellular movement, cellular growth and proliferation and proteolysis. Among genes linked to angiogenesis, Adamts4 and Npy were significantly upregulated in early granulation tissue in Mmp13^−/− mice, and a set of genes involved in leukocyte motility including Il6 were systematically downregulated at day 14. The expression of Pdgfd was downregulated in Mmp13^−/− granulation tissue in all time points. The expression of matrix metalloproteinases Mmp2, Mmp3, Mmp9 was also significantly downregulated in granulation tissue of Mmp13^−/− mice compared to WT mice. Mmp13^−/− mouse skin fibroblasts displayed altered cell morphology and impaired ability to contract collagen gel and decreased production of MMP-2. These results provide evidence for an important role for MMP-13 in wound healing by coordinating cellular activities important in the growth and maturation of granulation tissue, including myofibroblast function, inflammation, angiogenesis, and proteolysis.