Opioids are the gold standard for pain treatment but systemic opioid use is accompanied by central and intestinal side effects. As opioid receptors are expressed on peripheral sensory nerve endings, cutaneous and immune cells, local opioid application is being used for pain reduction in patients with inflammatory lesions such as burns, skin grafts, arthritis, acute or chronic wounds. In addition, peripherally active opioids have anti-inflammatory effects and can modulate wound healing. This review will cover anatomical, physiological and pathophysiological characteristics of opioid receptors and their ligands in peripheral tissues. We will then focus on mechanisms and the functional role of peripheral opioids in inflammation and wounds in experimental and clinical studies. Controversial results, methodological issues, implications for pharmacology, and therapeutic prospects for inflammatory diseases and wound healing will be discussed.