Pluripotent stem cells represent an almost unlimited source of most somatic cell types, providing them with great potential for cell-based therapies. The earliest methods used for generating human pluripotent stem cells as embryonic stem cells from human embryos suffered from ethical and technical drawbacks. These problems have been solved in part through the efficient induction of pluripotency in somatic cells using forced expression of a tetrad of factors. Here, we describe the formation of rhabdomyosarcomas originating from factor-induced pluripotent stem (iPS) cells derived from mouse neural stem cells. This underscores the commonly accepted notion that the use of retroviral delivery methods for inducing pluripotency will not be suited for clinical applications. However, the iPS cell field is developing rapidly. Safer protocols are now available for producing pluripotent stem cells. Here the current state-of-the-art in this field will be discussed.