The clinical translation of induced pluripotent stem cells (iPSCs) holds great potential for personalized therapeutics. However, one of the main obstacles is that the current workflow to generate iPSCs is expensive, time‐consuming, and requires standardization. A simplified and cost‐effective microfluidic approach is presented for reprogramming fibroblasts into iPSCs and their subsequent differentiation into neural stem cells (NSCs). This method exploits microphysiological technology, providing a 100‐fold reduction in reagents for reprogramming and a ninefold reduction in number of input cells. The iPSCs generated from microfluidic reprogramming of fibroblasts show upregulation of pluripotency markers and downregulation of fibroblast markers, on par with those reprogrammed in standard well‐conditions. The NSCs differentiated in microfluidic chips show upregulation of neuroectodermal markers (ZIC1, PAX6, SOX1), highlighting their propensity for nervous system development. Cells obtained on conventional well plates and microfluidic chips are compared for reprogramming and neural induction by bulk RNA sequencing. Pathway enrichment analysis of NSCs from chip showed neural stem cell development enrichment and boosted commitment to neural stem cell lineage in initial phases of neural induction, attributed to a confined environment in a microfluidic chip. This method provides a cost‐effective pipeline to reprogram and differentiate iPSCs for therapeutics compliant with current good manufacturing practices.