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Abstract Background Human pluripotent stem cell‐derived muscle models show great potential for translational research. Here, we describe developmentally inspired methods for the derivation of skeletal muscle cells and their utility in skeletal muscle tissue engineering with the aim to model skeletal muscle regeneration and dystrophy in vitro. Methods Key steps include the directed differentiation of human pluripotent stem cells to embryonic muscle progenitors followed by primary and secondary foetal myogenesis into three‐dimensional muscle. To simulate Duchenne muscular dystrophy (DMD), a patient‐specific induced pluripotent stem cell line was compared to a CRISPR/Cas9‐edited isogenic control line. Results The established skeletal muscle differentiation protocol robustly and faithfully recapitulates critical steps of embryonic myogenesis in two‐dimensional and three‐dimensional cultures, resulting in functional human skeletal muscle organoids (SMOs) and engineered skeletal muscles (ESMs) with a regeneration‐competent satellite‐like cell pool. Tissue‐engineered muscle exhibits organotypic maturation and function (up to 5.7 ± 0.5 mN tetanic twitch tension at 100 Hz in ESM). Contractile performance could be further enhanced by timed thyroid hormone treatment, increasing the speed of contraction (time to peak contraction) as well as relaxation (time to 50% relaxation) of single twitches from 107 ± 2 to 75 ± 4 ms (P