To explore restoration of ovarian function using epigenetically-related, induced pluripotent stem cells (iPSCs), we functionally evaluated the epigenetic memory of novel iPSC lines, derived from mouse and human ovarian granulosa cells (GCs) using c-Myc, Klf4, Sox2 and Oct4 retroviral vectors. The stem cell identity of the mouse and human GC-derived iPSCs (mGriPSCs, hGriPSCs) was verified by demonstrating embryonic stem cell (ESC) antigen expression using immunocytochemistry and RT-PCR analysis, as well as formation of embryoid bodies (EBs) and teratomas that are capable of differentiating into cells from all three germ layers. GriPSCs' gene expression profiles associate more closely with those of ESCs than of the originating GCs as demonstrated by genome-wide analysis of mRNA and microRNA. A comparative analysis of EBs generated from three different mouse cell lines (mGriPSCs; fibroblast-derived iPSC, mFiPSCs; G4 embryonic stem cells, G4 mESCs) revealed that differentiated mGriPSC-EBs synthesize 10-fold more estradiol (E2) than either differentiated FiPSC- or mESC-EBs under identical culture conditions. By contrast, mESC-EBs primarily synthesize progesterone (P4) and FiPSC-EBs produce neither E2 nor P4. Differentiated mGriPSC-EBs also express ovarian markers (AMHR, FSHR, Cyp19a1, ER and Inha) as well as markers of early gametogenesis (Mvh, Dazl, Gdf9, Boule and Zp1) more frequently than EBs of the other cell lines. These results provide evidence of preferential homotypic differentiation of mGriPSCs into ovarian cell types. Collectively, our data support the hypothesis that generating iPSCs from the desired tissue type may prove advantageous due to the iPSCs' epigenetic memory.