In a previous study, we isolated human amniotic fluid (AF)-derived mesenchymal stem cells (AF-MSCs) and utilized normoxic conditioned medium (AF-MSC-norCM) which has been shown to accelerate cutaneous wound healing. Because hypoxia enhances the wound healing function of mesenchymal stem cell-conditioned medium (MSC-CM), it is interesting to explore the mechanism responsible for the enhancement of wound healing function. In this work, hypoxia not only increased the proliferation of AF-MSCs but also maintained their constitutive characteristics (surface marker expression and differentiation potentials). Notably, more paracrine factors, VEGF and TGF-beta 1, were secreted into hypoxic conditioned medium from AF-MSCs (AF-MSC-hypoCM) compared to AF-MSC-norCM. Moreover, AF-MSC-hypoCM enhanced the proliferation and migration of human dermal fibroblasts in vitro, and wound closure in a skin injury model, as compared to AF-MSC-norCM. However, the enhancement of migration of fibroblasts accelerated by AF-MSC-hypoCM was inhibited by SB505124 and LY294002, inhibitors of TGF-beta/SMAD2 and PI3K/AKT, suggesting that AF-MSC-hypoCM-enhanced wound healing is mediated by the activation of TGF-beta/SMAD2 and PI3K/AKT. Therefore, AF-MSC-hypoCM enhances wound healing through the increase of hypoxia-induced paracrine factors via activation of TGF-beta/SMAD2 and PI3K/AKT pathways.