Recent developments in stem cell research have enabled the reprogramming of somatic cells to a pluripotent state using exogenous factors. Induced pluripotent stem (iPS) cells have the potential to differentiate into any cell type, and are being used to elucidate the molecular events that permit the conversion of one cell type to another. iPS cells have potential uses in in vitro disease modeling and toxicology screening, and as cellular therapies and regenerative medicine; however, various safety concerns exist that must be resolved before iPS cell therapy becomes a reality. Potential risks are related to the delivery of the endogenous factors, alterations in target cells, the cellular effects of the expression and reactivation of the factors that induce pluripotency, and safety issues related to the incorrect characterization and incomplete differentiation of the reprogrammed cells. In this review, the technique used to generate iPS cells is described, followed by a discussion of the safety concerns and how these concerns are currently being addressed.