After years of incremental progress, several recent studies have succeeded in deriving disease-relevant cell types from human pluripotent stem cell (hPSC) sources. The prospect of an unlimited cell source, combined with promising preclinical data, indicates that hPSC technology may be on the verge of clinical translation. In this Review, we discuss recent progress in directed differentiation, some of the new technologies that have facilitated the success of hPSC therapies and the remaining hurdles on the road towards developing hPSC-based cell therapies.