Induced pluripotent stem cell (iPSC)-based cell therapies have great potential for regenerative medicine but are also potentially associated with tumorigenic risks. Current rodent models are not optimal predictors of efficiency and safety for clinical application. Therefore, we developed a clinically relevant nonhuman primate model to assess the tumorigenic potential and in vivo efficacy of both undifferentiated and differentiated iPSCs in autologous settings without immunosuppression. Undifferentiated autologous iPSCs indeed form mature teratomas in a dose-dependent manner. However, tumor formation is accompanied by an inflammatory reaction. On the other hand, iPSC-derived mesodermal stromal-like cells form new bone in vivo without any evidence of teratoma formation. We therefore show in a large animal model that closely resembles human physiology that undifferentiated autologous iPSCs form teratomas, and that iPSC-derived progenitor cells can give rise to a functional tissue in vivo.