Considerable hope surrounds the use of disease-specific pluripotent stem cells, which can differentiate into any cell type, as starting materials to generate models of human disease that will allow exploration of pathological mechanisms and the search for new treatments. Disease-specific human embryonic stem cells have provided a useful source for studying certain disease states. However, reprogramming of human somatic cells that use readily accessible tissue, such as skin or blood, to generate embryonic-like induced pluripotent stem cells has opened new perspectives for modeling and understanding a larger number of human pathologies. Here, we examine the challenges in creating a disease model from human pluripotent stem cells, and describe their use to model both cell-autonomous and non-cell-autonomous mechanisms, the need for adequate control experiments and the genetic limitations of human induced pluripotent stem cells. Progress in these areas will substantially accelerate effective application of disease-specific human pluripotent stem cells for drug screening.