Adult stem cells have the potential to revolutionize regenerative medicine with their unique abilities to self-renew and differentiate into various phenotypes. This review examines progress and challenges in ex vivo tissue engineering with adult stem cells. These rare cells are harvested from a variety of tissues, including bone marrow, adipose, skeletal muscle, and placenta, and differentiate into cells of their own lineage and in some cases atypical lineages. Insight into the stem cell niche leads to the identification of matrix components, soluble factors, and physiological conditions that enhance the ex vivo amplification and differentiation of stem cells. Scaffolds composed of metals, naturally occurring materials, and synthetic polymers organize stem cells into complex spatial groupings that mimic native tissue. Cell signals from covalently bound ligands and slowly released regulatory factors in scaffolds direct stem cell fate. Future advances in stem cell biology and scaffold design will ultimately improve the efficacy of tissue substitutes as implants, in research, and as extracorporeal devices.