Parental imprinting is a form of epigenetic regulation that results in parent-of-origin differential gene expression. To study Prader-Willi syndrome (PWS), a developmental imprinting disorder, we generated case-derived induced pluripotent stem cells (iPSCs) harboring distinct aberrations in the affected region on chromosome 15. In studying PWS-iPSCs and human parthenogenetic iPSCs, we unexpectedly found substantial upregulation of virtually all maternally expressed genes (MEGs) in the imprinted DLK1-DIO3 locus on chromosome 14. Subsequently, we determined that IPW, a long noncoding RNA in the critical region of the PWS locus, is a regulator of the DLK1-DIO3 region, as its overexpression in PWS and parthenogenetic iPSCs resulted in downregulation of MEGs in this locus. We further show that gene expression changes in the DLK1-DIO3 region coincide with chromatin modifications rather than DNA methylation levels. Our results suggest that a subset of PWS phenotypes may arise from dysregulation of an imprinted locus distinct from the PWS region.