Regenerative medicine allows for the customization of tissues and organs which may bring hope to patients with incurable diseases and severe injuries. Therefore, reliable and safe methods for the generation of specific cell types must be established. Recently, different strategies have emerged to convert somatic cells into differentiated cells of interest. One of these strategies is cellular reprogramming, which converts somatic cells into induced pluripotent stem cells (iPSCs). These iPSCs are embryonic stem cell-like cells with almost unlimited developmental potential and can be differentiated into specific lineages. Alternatively, the method of transdifferentiation can be used to directly convert one terminally differentiated cell into another cell type. Both of these methods have proven to have the potential to push the field of cell replacement therapy forward. In this context, the skin is of particular interest because it represents an ideal source of somatic cells for reprogramming to pluripotency as well as transdifferentiation. In this review, we briefly compare both above-mentioned strategies and summarize the latest advances in this highly dynamic field of research.