We previously reported a technique for generating retinal pigment epithelia (RPE) and putative photoreceptors from embryonic stem (ES) cells. Here we tested whether our procedure can promote retinal differentiation of mouse and human induced pluripotent stem cells (iPSCs). Treating iPSCs with Wnt and Nodal antagonists in suspension culture induced expression of markers of retinal progenitor cells and generated RPE cells. Subsequently, treatment with retinoic acid and taurine generated cells positive for photoreceptor markers in all but one human cell lines. We propose that iPSCs can be induced to differentiate into retinal cells which have a possibility to be used as patient-specific donor cells for transplantation therapies.