Human pluripotent stem cells hold great promise for basic research and regenerative medicine due to their inherent property to propagate infinitely, while maintaining the potential to differentiate into any given cell type of the human body. Since the first derivation in 1998, pluripotent human embryonic stem cells (ESCs) have been studied intensively, and although these cells provoke ethical and immune rejection concerns, translation of human ESC research into the clinics has been initiated. The generation of embryonic stem cell-like human induced pluripotent stem cells (iPSCs) from somatic cells by virus-mediated overexpression of distinct sets of reprogramming factors (OCT4, SOX2, KLF4, and c-MYC, or OCT4, SOX2, NANOG, and LIN28) in 2007 has opened up further opportunities in the field. While circumventing the major disputes associated with human ESCs, iPSCs offer the same advantages and, in addition, new perspectives for personalized medicine. This review summarizes technical advances toward the generation of potentially clinically relevant human iPSCs. We also highlight key molecular events underlying the process of cellular reprogramming and discuss inherent features of iPSCs, including genome instability and epigenetic memory. Furthermore, we will give an overview of particular envisaged human iPSC applications and point out which improvements are yet to come and what has been achieved so far.