The technology required for creating an in vivo microenvironment and a neovasculature that can grow with and service new tissue is lacking, precluding the possibility of engineering complex three-dimensional organs. We have shown that when an arterio-venous (AV) loop is constructed in vivo in the rat groin, and placed inside a semisealed chamber, an extensive functional vasculature is generated. To test whether this unusually angiogenic environment supports the survival and growth of implanted tissue or cells, we inserted various preparations of rat and human skeletal muscle. We show that after 6 weeks incubation of muscle tissue, the chamber filled with predominantly well-vascularized recipient-derived adipose tissue, but some new donor-derived skeletal muscle and connective tissue were also evident. When primary cultured myoblasts were inserted into the chamber with the AV loop, they converted to mature striated muscle fibers. Furthermore, we identify novel adipogenesis-inducing properties of skeletal muscle. This represents the first report of a specific three-dimensional tissue grown on its own vascular supply.