Toxicity assessment is a major challenge for cost-effective drug development, and there is great need for better tools to accurately predict adverse drug reactions. Technological advances are empowering new cell-based assays for predictive toxicology, and these assays are critically dependent on the cell source. Here we describe the properties of human induced pluripotent stem (iPS) cells that make them a promising cell source for toxicity assessment and highlight progress to date and important roadblocks remaining.