Human iPSCs are pluripotent stem cells artificially generated by transiently expressing a set of exogenous transcription factors in somatic cells. We now realize the cells have a great value as a system to model human diseases. iPSCs can be generated from skin biopsies or blood samples of patients, and can be differentiated in vitro into cell types which are not easily accessible in patients, such as neurons and cardiomyocytes. Since iPSCs retain all the genomic information from the original patients, iPSCs could be utilized to study how genetic aberrancies in the patient manifest in target cells in vitro. Indeed, pioneering studies have demonstrated that disease-specific iPSCs are useful for understanding disease mechanisms. Moreover, iPSC-derived cells, when recapitulating some disease phenotypes in vitro, can be a fast-track screening tool for drug discovery. Further, iPSCs will also become a valuable tool to predict drug efficacy and toxicity for individuals, thus promoting personalized medicine.