Vascular diseases are a major threat to human health nowadays. While current treatments can cure some vascular diseases, their beneficial effects are only temporary; vascular regeneration holds the promise of permanent, effective treatments for many vascular diseases. Stem cells and endothelial progenitor cells can differentiate into vascular lineages and therefore have the potential to repair vascular systems. However, engineering appropriate microenvironments that will allow cell maturation and delivery remains the major challenge to the successful implementation of this treatment. This review introduces the cells that are being studied for vascular differentiation and regeneration; we then consider recent approaches to engineering microenvironments, including proper signaling cues and biodegradable scaffolds that will guide the development of these cells into vessels suitable for cell-based vascular therapy.