Human induced pluripotent stem cells (hiPSCs) can differentiate into notochordal cell (NC)-like cells when cultured in the presence of natural porcine nucleus pulposus (NP) tissue matrix. The method promises massive production of high-quality, functional cells to treat degenerative intervertebral discs (IVDs). Based on our previous work, we further examined the effect of cell-NP matrix contact and culture medium on the differentiation, and further assessed the functional differentiation ability of the generated NC-like. The study showed that direct contact between hiPSCs and NP matrix can promote the differentiation yield, whilst both the contact and non-contact cultures can generate functional NC-like cells. The generated NC-like cells are highly homogenous regarding the expression of notochordal marker genes. A culture medium containing a cocktail of growth factors (FGF, EGF, VEGF and IGF-1) also supported the notochordal differentiation in the presence of NP matrix. The NC-like cells showed excellent functional differentiation ability to generate NP-like tissue which was rich in aggrecan and collagen type II; and particularly, the proteoglycan to collagen content ratio was as high as 12.5-17.5 which represents a phenotype close to NP rather than hyaline cartilage. Collectively, the present study confirmed the effectiveness and flexibility of using natural NP tissue matrix to direct notochordal differentiation of hiPSCs, and the potential of using the generated NC-like cells for treating IVD degeneration