The treatment of full thickness skin loss, which can be extensive in the case of large burns, continues to represent a challenging clinical entity. This is due to an on-going inability to produce a suitable tissue engineered substrate that can satisfactorily replicate the epidermal and dermal in vivo niches to fulfil both aesthetic and functional demands. The current gold standard treatment of autologous skin grafting is inadequate because of poor textural durability, scarring and associated contracture, and because of a paucity of donor sites in larger burns. Tissue engineering has seen exponential growth in recent years with a number of ‘off-the-shelf’ dermal and epidermal substitutes now available. Each has its own limitations. In this review, we examine normal wound repair in relation to stem/progenitor cells that are intimately involved in this process within the dermal niche. Endothelial precursors, in particular, are examined closely and their phenotype, morphology and enrichment from multiple sources are described in an attempt to provide some clarity regarding the controversy surrounding their classification and role in vasculogenesis. We also review the role of the next generation of cellularized scaffolds and smart biomaterials that attempt to improve the revascularisation of artificial grafts, the rate of wound healing and the final cosmetic and functional outcome. Copyright © 2013 John Wiley & Sons, Ltd.