The recent derivation of disease-specific induced pluripotent stem cells (iPSCs) from somatic cells of patients with familial and sporadic forms of diseases and the demonstration of their ability to give rise to disease-relevant cell types provide an excellent opportunity to gain further insights into the mechanisms responsible for the pathophysiology of these diseases and develop novel therapeutic drugs. Here, we review the recent advances in iPSC technology for modeling of various lysosomal storage diseases (LSDs) and discuss possible strategies through which LSD-iPSCs can be exploited to identify novel drugs and improve future clinical treatment of LSDs.