Research on human embryonic stem cells (hESCs) and induced pluripotent (iPS) stem cells is currently a field of great potential in biomedicine. These cells represent a highly valuable tool for developmental biology studies, disease models, and drug screening and toxicity. The ultimate goal of hESCs and iPS cell research is the treatment of diseases or disorders for which there is currently no treatment or existing therapies are only partially effective. Despite the disproportionate short-term hopes generated, which are putting too much pressure on scientists, the international scientific community is making rapid progress in understanding hESCs and iPS cells. Nonetheless, great efforts have to be made to provide an answer to still quite basic questions concerning their biology. Moreover, translation to clinical applications in cell replacement therapy requires prior solution to ethical barriers. The recent development of iPS cells has provided a strong alternative to overcome ethical issues concerning hESCs. However, an in-depth characterization of their genetic and epigenetic features, as well as their differentiation potential still remains to be undertaken. This chapter will describe, precisely, what the critical issues are, where scientific and ethical barriers stand, and how we are to overcome them. Only then, we shall finally discover whether hESCs and iPS cells will allow building reproducible disease models, and whether they really are a safe tool, with great potential for regenerative medicine.