The recent generation of induced pluripotent stem cells (iPSCs) from somatic cells provides an invaluable resource for drug or toxicology screening, medical research, and patient-specific cell therapy. However, there are currently a number of obstacles including virus integration and the genetic alteration of iPSCs that will need to be overcome before these cells may be considered safe for clinical applications. Here, we highlight the potential and challenges of iPSC research and review advances in reprogramming methods that have rapidly moved the field closer to realizing the goal of generating safe iPSCs for transplantation.