Induced pluripotent stem cells (iPSCs) have enormous potential in regenerative medicine and disease modeling. It is now felt that clinical trials should be performed with iPSCs derived with nonintegrative constructs. Numerous studies, however, including those describing disease models, are still being published using cells derived from iPSCs generated with integrative constructs. Our experimental work presents the first evidence of spontaneous transgene reactivation in vitro in several cellular types. Our results show that the transgenes were predominantly silent in parent iPSCs, but in mesenchymal and endothelial iPSC derivatives, the transgenes experienced random upregulation of Nanog and c-Myc. Additionally, we provide evidence of spontaneous secondary reprogramming and reversion to pluripotency in mesenchymal stem cells derived from iPSCs. These findings strongly suggest that the studies, which use cellular products derived from iPSCs generated with retro- or lentiviruses, should be evaluated with consideration of the possibility of transgene reactivation. The in vitro model described here provides insight into the earliest events of culture transformation and suggests the hypothesis that reversion to pluripotency may be responsible for the development of tumors in cell replacement experiments. The main goal of this work, however, is to communicate the possibility of transgene reactivation in retro- or lenti-iPSC derivatives and the associated loss of cellular fidelity in vitro, which may impact the outcomes of disease modeling and related experimentation.