The ever-improving technology to generate induced pluripotent stem cells (iPSCs) has increased their potential use as novel candidates for disease modeling, drug screening, regenerative medicine and cell therapy. Indeed, iPSCs offer extensive capacity for self-renewal without the ethical concerns faced by embryonic stem cells (ESCs). With respect to potential applications in the immune system, many studies provide evidence to support that there are exclusive advantages to using iPSCs over other systems. Both hematopoietic stem cells and several types of mature immune cells have successfully been reprogrammed to iPSCs and vice versa, paving a path toward our ability to effectively model patient-specific diseases and provide potentially alternative cell sources for transfusion medicine. Despite these potential advances, some limitations regarding the use of iPSCs in the clinic still remain, including the immunogenicity of iPSCs and their derivatives, which is currently under debate in the field. In this review, we mainly focus on discussing the recent progress being made in the latest differentiation methods and clinical implications of iPSCs with respect to the immune system. Additionally, current issues regarding the clinical application of iPSCs are addressed, especially the controversy surrounding immunogenicity, along with various other perspectives.