Introduction of four transcription factors, Oct3/4, Sox2, Klf4, and c-Myc, can successfully reprogram somatic cells into embryonic stem (ES)-like cells. These cells, which are referred to as induced pluripotent stem (iPS) cells, closely resemble embryonic stem cells in genomic, cell biologic, and phenotypic characteristics, and the creation of these special cells was a major triumph in cell biology. In contrast to pluripotent stem cells generated by somatic cell nuclear-transfer (SCNT) or ES cells derived from the inner cell mass (ICM) of the blastocyst, direct reprogramming provides a convenient and reliable means of generating pluripotent stem cells. iPS cells have already shown incredible potential for research and for therapeutic applications in regenerative medicine within just a few years of their discovery. In this review, current techniques of generating iPS cells and mechanisms of nuclear reprogramming are reviewed, and the potential for therapeutic applications is discussed.