Human induced pluripotent stem (iPS) cells can be derived from lineage-restricted cells and represent an important tool to develop novel patient-specific cell therapies and research models for inherited and acquired diseases. Recently, patient-derived iPS cells, containing donor genetic background, have offered a breakthrough approach to study human genetics of neurodegenerative diseases. By offering an unlimited source of patient-specific disease-relevant cells, iPS cells hold great promise for understanding disease mechanisms, identifying molecular targets and developing phenotypic screens for drug discovery. This review will discuss the potential impact of using iPS cell-derived models in multiple sclerosis (MS) research and highlight some of the current challenges and prospective for generating novel therapeutic treatments for MS patients.