Induced pluripotent stem cells (iPSCs) can be generated from various adult cells, genetically modified and differentiated into diverse cell populations. Type I interferons (IFN-Is) have multiple immunotherapeutic applications; however, their systemic administration can lead to severe adverse outcomes. One way of overcoming the limitation is to introduce cells able to enter the site of pathology and to produce IFN-Is locally. As a first step towards the generation of such cells, here, we aimed to generate human iPSCs overexpressing interferon-beta (IFNB, IFNB-iPSCs). IFNB-iPSCs were obtained by CRISPR/Cas9 editing of the previously generated iPSC line K7-4Lf. IFNB-iPSCs overexpressed IFNB RNA and produced a functionally active IFN-β. The cells displayed typical iPSC morphology and expressed pluripotency markers. Following spontaneous differentiation, IFNB-iPSCs formed embryoid bodies and upregulated endoderm, mesoderm, and some ectoderm markers. However, an upregulation of key neuroectoderm markers, PAX6 and LHX2, was compromised. A negative effect of IFN-β on iPSC neuroectoderm differentiation was confirmed in parental iPSCs differentiated in the presence of a recombinant IFN-β. The study describes new IFN-β-producing iPSC lines suitable for the generation of various types of IFN-β-producing cells for future experimental and clinical applications, and it unravels an inhibitory effect of IFN-β on stem cell neuroectoderm differentiation.