Despite the advancement in electronic industry and the high potential of ambient intelligence applications in the domain of tele-health, the task of engineering such systems is non-trivial and convincing solutions are still missing. The engineering challenges to cope with and the inappropriateness of current engineering methods and research approaches complicate the process of tele-health system development. The purpose of this paper is twofold: (i) to list the current research challenges for tele-health systems from an engineering perspective and (ii) to show how we approach the challenges by means of an assisted living laboratory for engineering and evaluation purposes.