The rise in the incidence of musculoskeletal diseases is attributed to an increasing ageing population. The debilitating effects of musculoskeletal diseases, coupled with a lack of effective therapies, contribute to huge financial strains on healthcare systems. The focus of regenerative medicine has shifted to pluripotent stem cells (PSCs), namely, human embryonic stem cells and human-induced PSCs, due to the limited success of adult stem cell-based interventions. PSCs constitute a valuable cell source for musculoskeletal regeneration due to their capacity for unlimited self-renewal, ability to differentiate into all cell lineages of the three germ layers and perceived immunoprivileged characteristics. This review summarizes methods for chondrogenic, osteogenic, myogenic and adipogenic differentiation of PSCs and their potential for therapeutic applications.