Tissue engineering is a novel regenerative approach in the medicinal field that promises the regeneration of damaged tissues. Moreover, tissue engineering involves synthetic and natural biomaterials that facilitate tissue or organ growth outside the body. Not surprisingly, the demand for polymer-based therapeutical approaches in skin tissue defects has increased at an effective rate, despite the pressing clinical need. Among the 3D scaffolds for tissue engineering and regeneration approaches, hydrogel scaffolds have shown significant importance for their use as 3D cross-linked scaffolds in skin tissue regeneration due to their ideal moisture retention property and porosity biocompatibility, biodegradable, and biomimetic characteristics. In this review, we demonstrated the choice of ideal biomaterials to fabricate the novel hydrogel scaffolds for skin tissue engineering. After a short introduction to the bioactive and drug-loaded polymeric hydrogels, the discussion turns to fabrication and characterisation techniques of the polymeric hydrogel scaffolds. In conclusion, we discuss the excellent wound healing potential of stem cell-loaded hydrogels and Nano-based approaches to designing hydrogel scaffolds for skin tissue engineering.