We first aimed to generate transformed cell lines from a human induced pluripotent stem cell (hiPSC)-teratoma, and then examined the tumorigenic risks of the differentiated cells from hiPSC explant, because hiPSC-derivatives give rise to tumors in immune-deficient mice when transplanted. The colonies isolated from sparse cultures of hiPSC-teratoma cells expressed NANOG and OCT3/4 strongly, and telomerase reverse transcriptase (TERT) weakly. However, soft agar assay demonstrated that only one of them generated colonies in the gel, though hiPSCs, hTERT-transfected immortal cells, and its oncogene-transfected cells did not form any colonies. Furthermore, none of colonies isolated from the soft agar gel on primary culture (passage 0) of teratoma cells, expressed NANOG and OCT3/4 in the expanded cultures. The second soft agar assay on the colony-derived cells was unexpectedly negative. The cumulative growth curve, telomere shortening, and senescence-associated β-galactosidase (SA β-gal) staining confirmed the mortality of these cells, suggesting their reversible transformation. By using medium for embryonic stem cell (ESC medium) after MCDB 131 (MCDB) medium, the differentiated culture cells derived from hiPSC-teratoma converted into the cells expressing undifferentiated marker proteins, which lost afterwords even in ESC medium with feeder SNL76/7. The reversibility of transformation and de-differentiation suggest that tumorigenic risks of differentiated cells arise when they are exposed to suitable niches in vivo. Thus, removal of only the undifferentiated cells from iPSC-derivatives before transplantation does not solve the problem. Elucidation of mechanisms of reversibility and control of epigenetic changes is discussed as a safety bottleneck for hiPSC therapy.