Neurological diseases are mainly modeled using rodents through gene editing, surgery or injury approaches. However, differences between humans and rodents in terms of genetics, neural development, and physiology pose limitations on studying disease pathogenesis in rodent models for neuroscience research. In the past decade, the generation of induced pluripotent stem cells (iPSCs) and induced neural stem cells (iNSCs) by reprogramming somatic cells offers a powerful alternative for modeling neurological diseases and for testing regenerative medicines. Among the different somatic cell types, urine-derived stem cells (USCs) are an ideal cell source for iPSC and iNSC reprogramming, as USCs are highly proliferative, multipotent, epithelial in nature, and easier to reprogram than skin fibroblasts. In addition, the use of USCs represents a simple, low-cost and non-invasive procedure for generating iPSCs/iNSCs. This review describes the cellular and molecular properties of USCs, their differentiation potency, different reprogramming methods for the generation of iPSCs/iNSCs, and their potential applications in modeling neurological diseases.