Cellular differentiation, organization, proliferation and apoptosis are determined by a combination of an intrinsic genetic program, matrix/substrate interactions, and extracellular cues received from the local microenvironment. These molecular cues come in the form of soluble (e.g. cytokines) and insoluble (e.g. ECM proteins) factors, as well as signals from surrounding cells that can promote specific cellular processes leading to tissue formation or regeneration. Recent developments in the field of tissue engineering have employed biomaterials to present these cues, providing powerful tools to investigate the cellular processes involved in tissue development, or to devise therapeutic strategies based on cell replacement or tissue regeneration. These inductive scaffolds utilize natural and/or synthetic biomaterials fabricated into three-dimensional structures. This review summarizes the use of scaffolds in the dual role of structural support for cell growth and vehicle for controlled release of tissue inductive factors, or DNA encoding for these factors. The confluence of molecular and cell biology, materials science and engineering provides the tools to create controllable microenvironments that mimic natural developmental processes and direct tissue formation for experimental and therapeutic applications.