Epidermal grafting for wound healing involves the transfer of the epidermis from a healthy location to cover a wound. The structural difference of the epidermal graft in comparison to the split-thickness skin graft and full-thickness skin graft contributes to the mechanism of effect. While skin grafting is an epidermal transfer, little is known about the precise mechanism of wound healing by epidermal graft. This paper aims to explore the evolution of the epidermal graft harvesting system over the last five decades, the structural advantages of epidermal graft for wound healing and the current hypotheses on the mechanism of wound healing by epidermal graft. Three mechanisms are proposed: keratinocyte activation, growth factor secretion and reepithelialisation from the wound edge. We evaluate and explain how these processes work and integrate to promote wound healing based on the current in vivo and in vitro evidence. We also review the ongoing clinical trials evaluating the efficacy of epidermal graft for wound healing. The epidermal graft is a promising alternative to the more invasive conventional surgical techniques as it is simple, less expensive and reduces the surgical burden for patients in need of wound coverage.