The cellular and molecular bases of neurological diseases have been studied for decades; however, the underlying mechanisms are not yet fully elucidated. Compared with other disorders, diseases of the nervous system have been very difficult to study mainly due to the inaccessibility of the human brain and live neurons in vivo or in vitro and difficulties in examination of human postmortem brain tissue. Despite the availability of various genetically engineered animal models, these systems are still not adequate enough due to species variation and differences in genetic background. Human induced pluripotent stem cells (hiPSCs) reprogrammed from patient somatic cells possess the potential to differentiate into any cell type, including neural progenitor cells and postmitotic neurons; thus, they open a new area to in vitro modeling of neurological diseases and their potential treatment. Currently, many protocols for generation of various neuronal subtypes are being developed; however, most of them still require further optimization. Here, we highlight accomplishments made in the generation of dopaminergic and cholinergic neurons, the two subtypes most affected in Alzheimer's and Parkinson's diseases and indirectly affected in Huntington's disease. Furthermore, we discuss the potential role of hiPSC-derived neurons in the modeling and treatment of neurological diseases related to dopaminergic and cholinergic system dysfunction.