The goal of tissue engineering is to replace, regenerate, or restore damaged tissues by combining cells, biomaterials, and bioactive cues cooperatively. The practical translation of engineered tissues is still constrained by insufficient vascularization, immune-mediated inflammation, and inadequate structural and functional integration, despite notable advancements in scaffold design, stem cell biology, and biofabrication technologies. With a focus on the functions of stem cell sources, such as induced pluripotent stem cells, embryonic stem cells, and mesenchymal stem cells, as well as developments in biomaterial scaffold design, this review offers a thorough overview of the history and fundamental ideas of tissue engineering. The benefits and translational challenges of in vitro, ex vivo, and in vivo scaffold techniques are given special attention. This review examines the development of nano-enabled biomaterials as practical ways to get beyond diffusion restrictions and encourage angiogenesis, and it emphasizes vascularization as a crucial bottleneck in engineered tissues. As next-generation regeneration approaches, recent advances in immunomodulatory nanomaterials that control macrophage polarization and connect inflammation with vascular expansion are investigated. Additionally, the combination of nanotechnology and cutting-edge biofabrication techniques, such as 3D bioprinting and microfluidics, is investigated as a potent way to produce architecturally intricate, functional, and perfusable tissue constructs. In order to expedite the clinical translation of tissue-engineered therapies, future directions are finally discussed, with a focus on multifunctional nano-engineered platforms that combine angiogenic, immunomodulatory, and biofabrication capabilities.