The reprogramming of cord blood (CB) cells into induced pluripotent stem cells (iPSCs) has potential applications in regenerative medicine by converting CB banks into iPSC banks for allogeneic cell replacement therapy. Therefore, further investigation into novel approaches for efficient reprogramming is necessary. Here, we show that the lentiviral expression of OCT4 together with SOX2 (OS) driven by a strong spleen focus-forming virus (SFFV) promoter in a single vector can convert 2% of CB CD34(+) cells into iPSCs without additional reprogramming factors. Reprogramming efficiency was found to be critically dependent upon expression levels of OS. To generate transgene-free iPSCs, we developed an improved episomal vector with a woodchuck post-transcriptional regulatory element (Wpre) that increases transgene expression by 50%. With this vector, we successfully generated transgene-free iPSCs using OS alone. In conclusion, high-level expression of OS alone is sufficient for efficient reprogramming of CB CD34(+) cells into iPSCs. This report is the first to describe the generation of transgene-free iPSCs with the use of OCT4 and SOX2 alone. These findings have important implications for the clinical applications of iPSCs.