Ligaments and tendons are dense connective tissues that are important in transmitting forces and facilitate joint articulation in the musculoskeletal system. Their injury frequency is high especially for those that are functional important, like the anterior cruciate ligament (ACL) and medial collateral ligament (MCL) of the knee as well as the glenohumeral ligaments and the rotator cuff tendons of the shoulder. Because the healing responses are different in these ligaments and tendons after injury, the consequences and treatments are tissue- and site-specific. In this review, we will elaborate on the injuries of the knee ligaments as well as using functional tissue engineering (FTE) approaches to improve their healing. Specifically, the ACL of knee has limited capability to heal, and results of non-surgical management of its midsubstance rupture have been poor. Consequently, surgical reconstruction of the ACL is regularly performed to gain knee stability. However, the long-term results are not satisfactory besides the numerous complications accompanied with the surgeries. With the rapid development of FTE, there is a renewed interest in revisiting ACL healing. Approaches such as using growth factors, stem cells and scaffolds have been widely investigated. In this article, the biology of normal and healing ligaments is first reviewed, followed by a discussion on the issues related to the treatment of ACL injuries. Afterwards, current promising FTE methods are presented for the treatment of ligament injuries, including the use of growth factors, gene delivery, and cell therapy with a particular emphasis on the use of ECM bioscaffolds. The challenging areas are listed in the future direction that suggests where collection of energy could be placed in order to restore the injured ligaments and tendons structurally and functionally.