Satellite cells reside in defined niches and are activated upon skeletal muscle injury to facilitate regeneration. Mechanistic studies of skeletal muscle regeneration are hampered by the inability to faithfully simulate satellite cell biology in vitro. We sought to overcome this limitation by developing tissue engineered skeletal muscle (ESM) with (1) satellite cell niches and (2) the capacity to regenerate after injury. ESMs contained quiescent Pax7‐positive satellite cells in morphologically defined niches. Satellite cells could be activated to repair (i) cardiotoxin and (ii) mechanical crush injuries. Activation of the Wnt‐pathway was essential for muscle regeneration. Finally, muscle progenitors from the engineered niche developed de novo ESM in vitro and regenerated skeletal muscle after cardiotoxin‐induced injury in vivo. We conclude that ESM with functional progenitor niches reminiscent of the in vivo satellite cell niches can be engineered in vitro. ESM may ultimately be exploited in disease modeling, drug screening, or muscle regeneration.