Induced pluripotent stem cells (iPSCs) can self-renew indefinitely in culture and differentiate into all specialized cell types including gametes. iPSCs do not exist naturally and are instead generated (“induced” or “reprogrammed”) in culture from somatic cells through ectopic co-expression of defined pluripotency factors. Since they can be generated from any healthy person or patient, iPSCs are considered as a valuable resource for regenerative medicine to replace diseased or damaged tissues. In addition, reprogramming technology has provided a powerful tool to study mechanisms of cell fate decisions and to model human diseases, thereby substantially potentiating the possibility to (i) discover new drugs in screening formats and (ii) treat life-threatening diseases through cell therapy-based strategies. However, various legal and ethical barriers arise when aiming to exploit the full potential of iPSCs to minimize abuse or unauthorized utilization. In this review, we discuss bioethical, legal, and societal concerns associated with research and therapy using iPSCs. Furthermore, we present key questions and suggestions for stem cell scientists, legal authorities, and social activists investigating and working in this field.