Reprogramming differentiated human cells to induced pluripotent stem (iPS) cells has applications in basic biology, drug development, and transplantation. Human iPS cell derivation previously required vectors that integrate into the genome, which can create mutations and limit the utility of the cells in both research and clinical applications. We describe the derivation of human iPS cells with the use of nonintegrating episomal vectors. After removal of the episome, iPS cells completely free of vector and transgene sequences are derived that are similar to human embryonic stem (ES) cells in proliferative and developmental potential. These results demonstrate that reprogramming human somatic cells does not require genomic integration or the continued presence of exogenous reprogramming factors and removes one obstacle to the clinical application of human iPS cells.