Pluripotent stem cell research has made extraordinary progress over the last decade. The robustness of nuclear reprogramming of somatic cells into induced pluripotent stem cells (iPSCs) has created entirely novel opportunities for drug discovery and personalized regenerative medicine. Patient- and disease-specific iPSCs can be expanded indefinitely and differentiated into relevant cell types of different organ systems. As the utilization of iPSCs is becoming a key enabling technology across various scientific disciplines, there are still important challenges that need to be addressed. Here we review the current state and reflect on the issues that the stem cell and translational communities are facing in bringing iPSCs closer to clinical application.