The overall goal of tissue engineering is to create functional tissue grafts that can regenerate or replace our defective or worn out tissues and organs. Examples of grafts that are now in pre-clinical studies or clinical use include engineered skin, cartilage, bone, blood vessels, skeletal muscle, bladder, trachea, and myocardium. Engineered tissues are also finding applications as platforms for pharmacological and physiological studies in vitro. To fully mobilize the cell's biological potential, a new generation of tissue engineering systems is now being developed to more closely recapitulate the native developmental milieu, and mimic the physiologic mechanisms of transport and signaling. We discuss the interactions between regenerative biology and engineering, in the context of (i) creation of functional tissue grafts for regenerative medicine (where biological input is critical), and (ii) studies of stem cells, development and disease (where engineered tissues can serve as advanced 3D models).