Abstract: Research on rare diseases is limited by the poor availability of samples. Therefore, treatment of rare diseases is hampered by insufficient understanding of the mechanisms and resultant underdevelopment of viable therapies. With the advent and development of the technology of induced pluripotent stem cells (iPSCs) in recent years, more and more studies have begun to reprogram somatic cells derived from patients into iPSCs, which then differentiate into cells affected by the disease. Through developmental and functional analysis of the differentiated cell types, these stem cell models carrying patient-specific mutations have become an invaluable tool for research on rare diseases. iPSCs technology has revolutionized the ways of exploring the mechanisms of human rare diseases and developing therapies. In particular, the combination of human iPSCs technology with recent development in gene editing and 3D organoids makes iPSC-based platforms even more powerful in each area of their applications, including precision medicine. This review overviews recent advance in human iPSC-based modeling of rare diseases. Additionally, we outline the application of iPSCs technology particularly relevant to drug screening and cell therapy, so as to provide new inspiration for researchers.