Xenografting involves the transplantation of human tissue or cells into animal models and is an important tool for regenerative medicine research. Implantation of engineered human bone tissues into animal models, for example, is performed in preclinical evaluations of product safety and efficacy. With the advent of improved experimental methodologies, these models are further being exploited to interrogate molecular mechanisms and physiological interactions in vivo. In parallel to these developments, patient-derived xenograft murine models of cancer are increasingly being studied for various applications in cancer research and therapy; it follows that xenograft models in tissue engineering may be adapted for such approaches. In this review, we first discuss the development of human bone xenograft models to recapitulate physiological states in regenerative medicine. Subsequently, we discuss the use of these techniques for applications in modeling pathological states in skeletal oncology, namely, hematopoietic malignancies, bone metastatic disease, and primary bone malignancy.