Collagen gel scaffolds can potentially be utilized as cell seeded systems for skin tissue engineering. However, its dramatic contraction after being mixed with cells and its mechanical weakness are the drawbacks for its application to skin engineering. In this study, a compressed collagen gel scaffold was fabricated through the rapid expulsion of liquid from reconstituted gels by the application of 'plastic compression'(PC) technique. Both compressed and uncompressed gels were characterized with their gel contraction rate, morphology, the viability of seeded cells, their mechanical properties and the feasibility as a scaffold for constructing tissue-engineered skin. The results showed that the compression could significantly reduce the contraction of the collagen gel and improve its mechanical property. In addition, seeded dermal fibroblasts survived well in the compressed gel and seeded epidermal cells gradually developed into a stratified epidermal layer, and thus formed tissue engineered skin. This study reveals the potential of using compressed collagen gel as a scaffold for skin engineering.