Standard therapy for atherosclerotic coronary and peripheral arterial disease is insufficient in a significant number of patients because extensive disease often precludes effective revascularization. Stem cell therapy holds promise as a supplementary treatment for these patients, as pre-clinical and clinical research has shown transplanted cells can promote angiogenesis via direct and paracrine mechanisms. Induced pluripotent stem cells (iPSCs) are a novel cell type obtained by reprogramming somatic cells using exogenous transcription factor cocktails, which have been introduced to somatic cells via viral or plasmid constructs, modified mRNA or small molecules. IPSCs are now being used in disease modelling and drug testing and are undergoing their first clinical trial, but despite recent advances, the inefficiency of the reprogramming process remains a major limitation, as does the lack of consensus regarding the optimum transcription factor combination and delivery method and the uncertainty surrounding the genetic and epigenetic stability of iPSCs. IPSCs have been successfully differentiated into vascular endothelial cells (iPSC-ECs) and, more recently, induced endothelial cells (iECs) have also been generated by direct differentiation, which bypasses the pluripotent intermediate. IPSC-ECs and iECs demonstrate endothelial functionality in vitro and have been shown to promote neovessel growth and enhance blood flow recovery in animal models of myocardial infarction and peripheral arterial disease. Challenges remain in optimising the efficiency, safety and fidelity of the reprogramming and endothelial differentiation processes and establishing protocols for large-scale production of clinical-grade, patient-derived cells.