Induced pluripotent stem cells (iPSCs) generated by epigenetic reprogramming of personal somatic cells have limited therapeutic capacity for patients suffering from genetic disorders. Here we demonstrate restoration of a genomic mutation heterozygous for Pkd1 (polycystic kidney disease 1) deletion (Pkd1(+/-) to Pkd1(+/R+)) by spontaneous mitotic recombination. Notably, recombination between homologous chromosomes occurred at a frequency of 1~2 per 10,000 iPSCs. Southern blot hybridization and genomic PCR analyses demonstrated that the genotype of the mutation-restored iPSCs was indistinguishable from that of the wild-type cells. Importantly, the frequency of cyst generation in kidneys of adult chimeric mice containing Pkd1(+/R+) iPSCs was significantly lower than that of adult chimeric mice with parental Pkd1(+/-) iPSCs, and indistinguishable from that of wild-type mice. This repair step could be directly incorporated into iPSC development programmes prior to cell transplantation, offering an invaluable step forward for patients carrying a wide range of genetic disorders.