The utility of induced pluripotent stem (iPS) cells for investigating the molecular logic of pluripotency and for eventual clinical application is limited by the low efficiency of current methods for reprogramming. Here we show that reprogramming of juvenile human primary keratinocytes by retroviral transduction with OCT4, SOX2, KLF4 and c-MYC is at least 100-fold more efficient and twofold faster compared with reprogramming of human fibroblasts. Keratinocyte-derived iPS (KiPS) cells appear indistinguishable from human embryonic stem cells in colony morphology, growth properties, expression of pluripotency-associated transcription factors and surface markers, global gene expression profiles and differentiation potential in vitro and in vivo. To underscore the efficiency and practicability of this technology, we generated KiPS cells from single adult human hairs. Our findings provide an experimental model for investigating the bases of cellular reprogramming and highlight potential advantages of using keratinocytes to generate patient-specific iPS cells.