Recessive dystrophic epidermolysis bullosa (RDEB) is a skin fragility disease caused by mutations that affect the function and/or the amount of type VII collagen (C7), the major component of anchoring fibrils. Hallmarks of RDEB are unremitting blistering and chronic wounds leading to tissue fibrosis and scarring. Nearly all patients with severe RDEB develop highly metastatic squamous cell carcinomas (SCC) which are the main cause of death. Accumulating evidence from a murine RDEB model and human RDEB cells demonstrates that lack of C7 also directly alters the wound healing process. Non-healing RDEB wounds are characterized by increased inflammation, high transforming growth factor-β1 (TGF-β1) levels and activity, and are heavily populated by myofibroblasts responsible for enhanced fibrogenesis and matrix stiffness. These changes make the RDEB stroma a microenvironment prone to cancer initiation, where cells with features of cancer-associated fibroblasts are found. Here, we discuss recent knowledge on microenvironment alterations in RDEB, highlighting possible therapeutic targets to prevent and/or delay fibrosis and SCC development.