Reprogramming somatic cells into a pluripotent state brings patient-tailored, ethical controversy-free cellular therapy closer to reality. However, stem cells and cancer cells share many common characteristics; therefore, it is crucial to be able to discriminate between them. We generated two induced pluripotent stem cell (iPSC) lines, with NANOG pre-transduction followed by OCT3/4, SOX2, and LIN28 overexpression. One of the cell lines, CHiPS W, showed normal pluripotent stem cell characteristics, while the other, CHiPS A, though expressing pluripotency markers, failed to differentiate and gave rise to germ cell-like tumours in vivo. Comparative genomic hybridisation analysis of the generated iPS lines revealed that they were genetically more stable than human embryonic stem cell counterparts. This analysis proved to be predictive for the differentiation potential of analysed cells. Moreover, the CHiPS A line expressed a lower ratio of p53/p21 when compared to CHiPS W. NANOG pre-induction followed by OCT3/4, SOX2, MYC, and KLF4 induction resulted in the same tumour-inducing phenotype. These results underline the importance of a re-examination of the role of NANOG during reprogramming. Moreover, this reprogramming method may provide insights into primordial cell tumour formation and cancer stem cell transformation.