Studies of human brain development are critical as research on neurological disorders have been progressively advanced. However, understanding the process of neurogenesis through analysis of the early embryo is complicated and limited by a number of factors, including the complexity of the embryos, availability, and ethical constrains. The emerging of human embryonic stem cells (hESCs) and induced pluripotent stem cells (iPSCs) has shed light of a new approach to study both early development and disease pathology. The cells behave as precursors of all embryonic lineages; thus, they allow tracing the history from the root to individual branches of the cell lineage tree. Systems for neural differentiation of hESCs and iPSCs have provided an experimental model that can be used to augment in vitro studies of in vivo brain development. Interestingly, iPSCs derived from patients, containing donor genetic background, have offered a breakthrough approach to study human genetics of neurodegenerative diseases. This paper summarizes the recent reports of the development of iPSCs from patients who suffer from neurological diseases and evaluates the feasibility of iPSCs as a disease model. The benefits and obstacles of iPSC technology are highlighted in order to raising the cautions of misinterpretation prior to further clinical translations.