Ectopic expression of the four transcription factors Oct4, Sox2, c-Myc, and Klf4 is sufficient to confer a pluripotent state upon the fibroblast genome, generating induced pluripotent stem (iPS) cells. It remains unknown if nuclear reprogramming induced by these four factors globally resets epigenetic differences between differentiated and pluripotent cells. Here, using novel selection approaches, we have generated iPS cells from fibroblasts to characterize their epigenetic state. Female iPS cells showed reactivation of a somatically silenced X chromosome and underwent random X inactivation upon differentiation. Genome-wide analysis of two key histone modifications indicated that iPS cells are highly similar to ES cells. Consistent with these observations, iPS cells gave rise to viable high-degree chimeras with contribution to the germline. These data show that transcription factor-induced reprogramming leads to the global reversion of the somatic epigenome into an ES-like state. Our results provide a paradigm for studying the epigenetic modifications that accompany nuclear reprogramming and suggest that abnormal epigenetic reprogramming does not pose a problem for the potential therapeutic applications of iPS cells.