Induced pluripotent stem cells (iPSCs) have been generated by enforced expression of defined sets of transcription factors in somatic cells. It remains controversial whether iPSCs are molecularly and functionally equivalent to blastocyst-derived embryonic stem (ES) cells. By comparing genetically identical mouse ES cells and iPSCs, we show here that their overall messenger RNA and microRNA expression patterns are indistinguishable with the exception of a few transcripts encoded within the imprinted Dlk1-Dio3 gene cluster on chromosome 12qF1, which were aberrantly silenced in most of the iPSC clones. Consistent with a developmental role of the Dlk1-Dio3 gene cluster, these iPSC clones contributed poorly to chimaeras and failed to support the development of entirely iPSC-derived animals ('all-iPSC mice'). In contrast, iPSC clones with normal expression of the Dlk1-Dio3 cluster contributed to high-grade chimaeras and generated viable all-iPSC mice. Notably, treatment of an iPSC clone that had silenced Dlk1-Dio3 with a histone deacetylase inhibitor reactivated the locus and rescued its ability to support full-term development of all-iPSC mice. Thus, the expression state of a single imprinted gene cluster seems to distinguish most murine iPSCs from ES cells and allows for the prospective identification of iPSC clones that have the full development potential of ES cells.