Abstract Sebaceous glands (SGs), as holocrine-secreting appendages, lubricate the skin and play a central role in the skin barrier. Large full-thickness skin defects cause overall architecture disruption and SG loss. However, an effective strategy for SG regeneration is lacking. Organoids are 3D multicellular structures that replicate key anatomical and functional characteristics of in vivo tissues and exhibit great potential in regenerative medicine. Recently, considerable progress has been made in developing reliable procedures for SG organoids and existing SG organoids recapitulate the main morphological, structural and functional features of their in vivo counterparts. Engineering approaches empower researchers to manipulate cell behaviors, the surrounding environment and cell–environment crosstalk within the culture system as needed. These techniques can be applied to the SG organoid culture system to generate functionally more competent SG organoids. This review aims to provide an overview of recent advancements in SG organoid engineering. It highlights some potential strategies for SG organoid functionalization that are promising to forge a platform for engineering vascularized, innervated, immune-interactive and lipogenic SG organoids. We anticipate that this review will not only contribute to improving our understanding of SG biology and regeneration but also facilitate the transition of the SG organoid from laboratory research to a feasible clinical application.