We compared bona fide human induced pluripotent stem cells (iPSCs) derived from umbilical cord blood (CB) cells and neonatal keratinocytes (K). As a consequence of both incomplete erasure of tissue-specific methylation and aberrant de novo methylation, CB-iPSCs and K-iPSCs were distinct in genome-wide DNA methylation profiles and differentiation potential. Extended passage of some iPSC clones in culture did not improve their epigenetic resemblance to embryonic stem cells, implying that some human iPSCs retain a residual 'epigenetic memory' of their tissue of origin.