The burgeoning field of bioengineering has witnessed significant strides due to the advent of stem cell models, particularly in their application in advanced therapy medicinal products (ATMPs). In this review, we examine the multifaceted impact of these developments, emphasizing the potential of stem cell models to enhance the sophistication of ATMPs and to offer alternatives to animal testing. Stem cell-derived tissues are particularly promising because they can reshape the preclinical landscape by providing more physiologically relevant and ethically sound platforms for drug screening and disease modelling. We also discuss the critical challenges of reproducibility and accuracy in measurements to ensure the integrity and utility of stem cell models in research and application. Moreover, this review highlights the imperative of stem cell models to align with regulatory standards, ensuring using stem cells in ATMPs translates into safe and effective clinical therapies. With regulatory approval serving as a gateway to clinical adoption, the collaborative efforts between scientists and regulators are vital for the progression of stem cell applications from bench to bedside. We advocate for a balanced approach that nurtures innovation within the framework of rigorous validation and regulatory compliance, ensuring that stem cell-base solutions are maximized to promote public trust and patient health in ATMPs.