Induced pluripotent stem (iPS) cells have great potential in regenerative medicine, including cell replacement therapies and disease modelling in vitro. However, with this potential comes several challenges, including clinical safety, reprogramming and differentiation efficiency, and compromised functionality of differentiated cell types after transplantation. Many of these issues arise from imprecise control of cell fate. With large-scale sequencing and genome-editing technologies we can now precisely manipulate the genome, which has expanded our knowledge of functional cell types and cell identity. These technologies may improve our efforts in generating iPS-derived therapeutic cells and in development of therapies for human diseases.