The goal of this study was to fabricate a 3-dimensional (3-D) porous scaffold derived from bladder submucosa (BSM) and further recellularize the scaffold with human bladder cells for cell-based urethral tissue engineering. Fresh porcine BSM was soaked with peracetic acid (PAA) at different concentrations (0,1,3,5 and 10%) and then treated with Triton X-100 for decellularization. DNA content analysis showed that nuclear material was removed from the BSM scaffold. Treatment with 5% PAA led to high porosity on the surface of the matrix with retention of less cellular material and maintained about 75% of normal tensile strength. In 3-D dynamic culture, cells formed even multiple layers on the surface of matrix. Cells also penetrated deeper into the lamina propria of the matrix compared to untreated matrix. Immunocytochemical staining indicated that the grafted bladder cells expressed urothelial- and smooth muscle-specific markers both, in vitro and in vivo. This study demonstrates that decellularized/oxidized BSM possesses 3-D porosity for cell infiltration into the matrix. Further, cells seeded on decellularized/oxidized BSM and grown in dynamic culture, significantly promoted cell-matrix penetration in vitro and promoted cell growth in vivo. Scaffolds with such characteristics have potential applications in cell-based urological tissue engineering.