The well documented decline in the regenerative ability of ageing human skin has been attributed to many factors including genomic instability, telomere shortening, poor nutrient sensing, cellular senescence, and stem cell exhaustion. However, a role for the dermal cellular and molecular microenvironment in skin ageing is just emerging. We previously showed that dermal pericytes co-operate with fibroblasts to improve human skin regeneration in an organotypic skin culture model, and even do so in the absence of fibroblasts. Here, we report that the number of dermal cells, particularly pericytes, declines significantly in human skin of donors aged > 50 years. Notably, aged pericytes promoted epidermal regeneration of neonatal keratinocytes in organotypic cultures and the resulting epithelium exhibited a Ki67+/ΔNp63+ basal layer and terminal differentiation. However, the epithelium lacked several features of homeostasis displaying lower levels of ΔNp63 expression, decreased LAMA5 deposition at the dermo-epidermal junction, and the absence of basement membrane and hemi-desmosome assembly. We conclude that a decline in pericyte incidence and function contribute to an impaired epidermal microenvironment and poor skin regeneration with ageing in the human skin.