Human-induced pluripotent stem cells (hiPSCs) provide an invaluable source for regenerative medicine, but are limited by proficient lineage-specific differentiation. Here we reveal that hiPSCs derived from human fibroblasts (Fibs) versus human cord blood (CB) exhibit indistinguishable pluripotency, but harbour biased propensities for differentiation. Genes associated with germ layer specification were identical in Fib- or CB-derived iPSCs, whereas lineage-specific marks emerge upon differentiation induction of hiPSCs that were correlated to the cell of origin. Differentiation propensities come at the expense of other lineages and cannot be overcome with stimuli for alternative cell fates. Although incomplete DNA methylation and distinct histone modifications of lineage-specific loci correlate to lineage-specific transcriptome priming, transitioning hiPSCs into naive state of pluripotency removes iPSC-memorized transcriptome. Upon re-entry to the primed state, transcriptome memory is restored, indicating a human-specific phenomenon whereby lineage gated developmental potential is not permanently erased, but can be modulated by the pluripotent state.