The field of regenerative medicine has witnessed remarkable advancements with the emergence of induced pluripotent stem cells (iPSCs) derived from a variety of sources. Among these, urine-derived induced pluripotent stem cells (u-iPSCs) have garnered substantial attention due to their non-invasive and patient-friendly acquisition method. This review manuscript delves into the potential and application of u-iPSCs in advancing precision medicine, particularly in the realms of drug testing, disease modeling, and cell therapy. U-iPSCs are generated through the reprogramming of somatic cells found in urine samples, offering a unique and renewable source of patient-specific pluripotent cells. Their utility in drug testing has revolutionized the pharmaceutical industry by providing personalized platforms for drug screening, toxicity assessment, and efficacy evaluation. The availability of u-iPSCs with diverse genetic backgrounds facilitates the development of tailored therapeutic approaches, minimizing adverse effects and optimizing treatment outcomes. Furthermore, u-iPSCs have demonstrated remarkable efficacy in disease modeling, allowing researchers to recapitulate patient-specific pathologies in vitro. This not only enhances our understanding of disease mechanisms but also serves as a valuable tool for drug discovery and development. In addition, u-iPSC-based disease models offer a platform for studying rare and genetically complex diseases, often underserved by traditional research methods. The versatility of u-iPSCs extends to cell therapy applications, where they hold immense promise for regenerative medicine. Their potential to differentiate into various cell types, including neurons, cardiomyocytes, and hepatocytes, enables the development of patient-specific cell replacement therapies. This personalized approach can revolutionize the treatment of degenerative diseases, organ failure, and tissue damage by minimizing immune rejection and optimizing therapeutic outcomes. However, several challenges and considerations, such as standardization of reprogramming protocols, genomic stability, and scalability, must be addressed to fully exploit u-iPSCs’ potential in precision medicine. In conclusion, this review underscores the transformative impact of u-iPSCs on advancing precision medicine and highlights the future prospects and challenges in harnessing this innovative technology for improved healthcare outcomes.