Loss of healthy bone tissue and dysosteogenesis are still common and significant problems in clinics. Cell-based therapy using mesenchymal stem cells (MSCs) has been performed in patients for quite some time, but the inherent drawbacks of these cells, such as the reductions in proliferation rate and osteogenic differentiation potential that occur with aging, greatly limit their further application. Moreover, embryonic stem cells (ESCs) have brought new hope to osteoregenerative medicine because of their full pluripotent differentiation potential and excellent performance in bone regeneration. However, the ethical issues involved in destroying human embryos and the immune reactions that occur after transplantation are two major stumbling blocks impeding the clinical application of ESCs. Instead, induced pluripotent stem cells (iPSCs), which are ESC-like pluripotent cells that are reprogrammed from adult somatic cells using defined transcription factors, are considered a more promising source of cells for regenerative medicine because they present no ethical or immunological issues. Here, we summarize the primary technologies for generating iPSCs and the biological properties of these cells, review the current advances in iPSC-based bone regeneration and, finally, discuss the remaining challenges associated with these cells, particularly safety issues and their potential application for osteoregenerative medicine.