In age-related macular degeneration (AMD), stem cells could possibly replace or regenerate disrupted pathologic retinal pigment epithelium (RPE), and produce supportive growth factors and cytokines such as brain-derived neurotrophic factor. Induced pluripotent stem cells (iPSCs)-derived RPE was first subretinally transplanted in a neovascular AMD patient in 2014. Areas covered: Induced PSCs are derived from the introduction of transcription factors to adult cells under specific cell culture conditions, followed by differentiation into RPE cells. Induced PSC-derived RPE cells exhibit ion transport, membrane potential, polarized VEGF secretion and gene expression that is similar to native RPE. Despite having similar in vitro function, morphology, immunostaining and microscopic analysis, it remains to be seen if iPSC-derived RPE can replicate the myriad of in vivo functions, including immunomodulatory effects, of native RPE cells. Historically, adjuvant RPE transplantation during CNV resections were technically difficult and complicated by immune rejection. Autologous iPSCs are hypothesized to reduce the risk of immune rejection, but their production is time-consuming and expensive. Alternatively, allogenic transplantation using human leukocyte antigen (HLA)-matched iPSCs, similar to HLA-matched organ transplantation, is currently being investigated. Expert opinion: Challenges to successful transplantation with iPSCs include surgical technique, a pathologic subretinal microenvironment, possible immune rejection, and complications of immunosuppression.