Tissue-engineered skin represents a useful strategy for the treatment of deep skin injuries and might contribute to the understanding of skin regeneration. The use of dermal papilla cells (DPCs) as a dermal component in a permanent composite skin with human hair follicle stem cells (HFSCs) was evaluated by studying the tissue-engineered skin architecture, stem cell persistence, hair regeneration, and graft-take in nude mice. A porcine acellular dermal matrix was seeded with HFSCs alone and with HFSCs plus human DPCs or dermal fibroblasts (DFs). In vitro, the presence of DPCs induced a more regular and multilayered stratified epidermis with more basal p63-positive cells and invaginations. The DPC-containing constructs more accurately mimicked the skin architecture by properly stratifying the differentiating HFSCs and developing a well-ordered epithelia that contributed to more closely recapitulate an artificial human skin. This acellular dermal matrix previously repopulated in vitro with HFSCs and DFs or DPCs as the dermal component was grafted in nude mice. The presence of DPCs in the composite substitute not only favored early neovascularization, good assimilation and remodeling after grafting but also contributed to the neovascular network maturation, which might reduce the inflammation process, resulting in a better healing process, with less scarring and wound contraction. Interestingly, only DPC-containing constructs showed embryonic hair bud-like structures with cells of human origin, presence of precursor epithelial cells, and expression of a hair differentiation marker. Although preliminary, these findings have demonstrated the importance of the presence of DPCs for proper skin repair.