Mesenchymal stem cells ( MSCs) are being assessed for ameliorating the severity of graft‐versus‐host disease, autoimmune conditions, musculoskeletal injuries and cardiovascular diseases. While most of these clinical therapeutic applications require substantial cell quantities, the number of MSCs that can be obtained initially from a single donor remains limited. The utility of MSCs derived from human‐induced pluripotent stem cells (hi PSCs) has been shown in recent pre‐clinical studies. Since adult MSCs have limited capability regarding proliferation, the quantum of bioactive factor secretion and immunomodulation ability may be constrained. Hence, the alternate source of MSCs is being considered to replace the commonly used adult tissue‐derived MSCs. The MSCs have been obtained from various adult and foetal tissues. The hi PSC‐derived MSCs ( iMSCs) are transpiring as an attractive source of MSCs because during reprogramming process, cells undergo rejuvination, exhibiting better cellular vitality such as survival, proliferation and differentiations potentials. The autologous iMSCs could be considered as an inexhaustible source of MSCs that could be used to meet the unmet clinical needs. Human‐induced PSC‐derived MSCs are reported to be superior when compared to the adult MSCs regarding cell proliferation, immunomodulation, cytokines profiles, microenvironment modulating exosomes and bioactive paracrine factors secretion. Strategies such as derivation and propagation of iMSCs in chemically defined culture conditions and use of footprint‐free safer reprogramming strategies have contributed towards the development of clinically relevant cell types. In this review, the role of i PSC‐derived mesenchymal stromal cells ( iMSCs) as an alternate source of therapeutically active MSCs has been described. Additionally, we also describe the role of iMSCs in regenerative medical applications, the necessary strategies, and the regulatory policies that have to be enforced to render iMSC's effectiveness in translational medicine.