Critically short telomeres activate p53-mediated apoptosis, resulting in organ failure and leading to malignant transformation. Mutations in genes responsible for telomere maintenance are linked to a number of human diseases. We derived induced pluripotent stem cells (iPSCs) from 4 patients with aplastic anemia or hypocellular bone marrow carrying heterozygous mutations in the telomerase reverse transcriptase (TERT) or the telomerase RNA component (TERC) telomerase genes. Both mutant and control iPSCs upregulated TERT and TERC expression compared with parental fibroblasts, but mutant iPSCs elongated telomeres at a lower rate compared with healthy iPSCs, and the deficit correlated with the mutations' impact on telomerase activity. There was no evidence for alternative lengthening of telomere (ALT) pathway activation. Elongation varied among iPSC clones derived from the same patient and among clones from siblings harboring identical mutations. Clonal heterogeneity was linked to genetic and environmental factors, but was not influenced by residual expression of reprogramming transgenes. Hypoxia increased telomere extension in both mutant and normal iPSCs. Additionally, telomerase-mutant iPSCs showed defective hematopoietic differentiation in vitro, mirroring the clinical phenotype observed in patients and demonstrating that human telomere diseases can be modeled utilizing iPSCs. Our data support the necessity of studying multiple clones when using iPSCs to model disease.