Stem cells are defined by their capacity of self-renewal and multilineage differentiation, which make them uniquely situated to treat a broad spectrum of human diseases. Based on a series of remarkable studies in several fields of regenerative medicine, their application is not too far from the clinical practice. Full-thickness burns and severe traumas can injure skin and its appendages, which protect animals from water loss, temperature change, radiation, trauma and infection. In adults, the normal outcome of repair of massive full-thickness burns is fibrosis and scarring without any appendages, such as hair follicles, sweat and sebaceous glands. Perfect skin regeneration has been considered impossible due to the limited regenerative capacity of epidermal keratinocytes, which are generally thought to be the key source of the epidermis and skin appendages. Currently, researches on stem cells, such as epidermal stem cells, dermal stem cells, mesenchymal stem cells from bone marrow, and embryonic stem cells, bring promise to functional repair of skin after severe burn injury, namely, complete regeneration of skin and its appendages. In this study, we present an overview of the most recent advances in skin repair and regeneration by using stem cells.