Induced pluripotent stem (iPS) cells are considered as having the greatest potential for use in cell-based therapies. However, at least two hurdles remain: integrating viral transgenes and introducing the c-Myc and Klf4 oncogenes. In a previous study, fibroblasts were incapable of generating iPS cells in the absence of both oncogenes and viral infection. For the present study, we tested our hypothesis that iPS cells can be generated without oncogenes and viral infection under hypoxic conditions and used for cell therapies. By avoiding oncogenic factors and virus integration, this strategy would decrease the potential for cancer formation. According to our observations, the repeated transfection of two expression plasmids (Oct4 and Sox2) into mouse embryonic fibroblasts (MEFs) and combined hypoxic condition resulted in the generation of a novel iPS cell. At 6 h post-transfection, MEFs were subjected to hypoxic conditions (3% O2) for 24 h; this procedure was repeated four times. The resulting MEFs were seeded on feeder cells on day 9; iPS cell clones were observed 12 days post-seeding and designated as iPS-OSH. Data for cell morphology, stem cell marker staining, gene expression profiles, and embryonic body, teratoma, and chimeric mouse formation indicated iPS-OSH pluripotent capability. Neural precursor cells differentiated from iPS-OSH cells were used to treat an ischemic stroke mouse model; results from a behavior analysis indicate that the therapeutic group surpassed the control group. Further, iPS-OSH-derived neural precursor cells differentiated into neurons and astrocytes in mouse stroke brains. In conclusion, we generated a novel iPS-OSH in the absence of viral infection and oncogenic factors and could use it for ischemic stroke therapy.