Localized scleroderma (also called morphea) is a term encompassing a spectrum of sclerotic autoimmune diseases that primarily affect the skin, but also might involve underlying structures such as the fat, fascia, muscle, and bones. Its exact pathogenesis is still unknown, but several trigger factors in genetically predisposed individuals might initially lead to an immunologically triggered release of pro-inflammatory cytokines, resulting in a profound dysregulation of the connective tissue metabolism and ultimately to induction of fibrosis. To date, there are no specific serological markers available for localized scleroderma. Within the last years, several validated clinical scores have been introduced as potential outcome measures for the disease. Given the rarity of localized scleroderma, only few evidence-based therapeutical treatment options exist. So far, the most robust data is available for ultraviolet A1 phototherapy in disease that is restricted to the skin, and methotrexate alone or in combination with systemic corticosteroids in more severe disease that additionally affects extracutaneous structures. This practical review summarizes relevant information on the epidemiology, pathogenesis, clinical subtypes and classifications, differential diagnoses, clinical scores and outcome measures, and current treatment strategies of localized scleroderma.