Bioengineering approaches to slope stabilization involve biological and mechanical methods with low impact on the environment and landscape. Slope stabilization using vegetation patches or islands can greatly decrease runoff and soil erosion on an eroded lake shore. While vegetation islands showed promise for forest and grassland reclamation, they have rarely been used on eroded lake shores. A study was conducted to determine whether bioengineering using native vegetation islands and terraces could successfully revegetate and stabilize a severely eroded lake shore slope in the central aspen parkland, Alberta, Canada. Three gullies and three slopes were terraced using pressure treated planks, then transplanted with non-dormant (mid-August) and dormant (mid-October) 20 cm diameter vegetation islands in a soil amended with 25% (by volume) compost. Volumetric water content was significantly less in lower slope positions than upper slope positions, and sediment transport to lower slope positions was much reduced. After one year, both non-dormant and dormant transplanted islands survived and established on the terraced slope, under relatively inhospitable growing conditions. Although non-dormant islands had significantly lower vegetation mortality (10% or less) than dormant islands on both slopes and gullies, no differences in health and vigour were found by the end of the study. Overall plant species number on the site increased during the study. Graminoid species densities increased, while those of forbs, shrub and tree species declined in the transplanted vegetation islands. Non-dormant islands had greater graminoid density than dormant islands, where Poa pratensis was the dominant species in the islands. Bioengineering with vegetation islands and terraces can assist in trapping runoff and sediment, and accelerate establishment of a diversity of plant species and groups relative to traditional revegetation methods.