We examine effects of the exchange interaction on the thermalization dynamics of high‐density photogenerated plasmas in quantum wells. A technique for simulating the transient dynamics is presented which combines the conventional Ensemble Monte Carlo method for the carrier‐phonon scattering, with a molecular dynamics scheme for treating the many‐body contributions to the long‐range Coulomb potentials. Account is taken of the exchange‐energy interactions in keeping with the exclusion principle and the Fermi nature of the system. Our results indicate that the exchange corrections slow the cooling of the photogenerated plasma at carrier densities above 1012cm−2. The effect is due primarily to a weakening of the direct Colomb force, and demonstrates that calculations based on simple carrier–carrier scattering alone would underestimate thermalization time constants.