Human induced pluripotent stem (iPS) cells have been generated from various cell types including blood cells, and offer certain advantages as a starting population for reprogramming postnatal somatic cells. Unlike adult stem cells, iPS cells can proliferate limitlessly in culture while retaining their potential to differentiate into any cell type, including hematopoietic lineages. Derivation of patient-specific iPS cells, in combination with improved hematopoietic differentiation protocols, provides an alternative to generate histocompatible stem cells for bone marrow transplantation. In addition, the ability to reprogram blood cells and redifferentiate iPS cells back to hematopoietic lineages provides opportunities to establish novel models for acquired and inherited blood diseases. This article will summarize recent progress in human iPS cells derived from blood cells and hematopoietic differentiation from iPS cells. Advantages of blood as a source for reprogramming and applications in regenerative medicine will be discussed.