Vascular tissue engineering aims to restore blood flow by seeding artificial tubular scaffolds with endothelial and smooth muscle cells, thus creating bioartificial blood vessels. Herein, the progenitors of smooth muscle and endothelial cells hold great promise because they efficiently differentiate and harbor longevity. In this review, we describe a novel tissue engineering approach that uses current insights from developmental biology, that is, progenitor cell plasticity, and the latest advances in biomaterial design. We focus specifically on developmental processes that regulate progenitor cell (trans)differentiation and offer a platform for the integration of these molecular clues into biomaterial design. We propose a novel engineering paradigm for the creation of a small-diameter blood vessel wherein progenitor cell differentiation and tissue organization are instructed by the biomaterial solely. With this review, we emphasize the power of integrating developmental biology and material science for vascular tissue engineering.