Schizophrenia is a chronic and severe neuropsychiatric condition manifested by cognitive, emotional, affective, perceptual, and behavioral abnormalities. Despite decades of research, the biological substrates driving the signs and symptoms of the disorder remain elusive, thus hampering progress in the development of treatments aimed at disease etiologies. The recent emergence of human induced pluripotent stem cell (hiPSC)-based models has provided the field with a highly innovative approach to generate, study, and manipulate living neural tissue derived from patients, making possible the exploration of fundamental roles of genes and early-life stressors in disease-relevant cell types. Here, we begin with a brief overview of the clinical, epidemiological, and genetic aspects of the condition, with a focus on schizophrenia as a neurodevelopmental disorder. We then highlight relevant technical advancements in hiPSC models and assess novel findings attained using hiPSC-based approaches and their implications for disease biology and treatment innovation. We close with a critical appraisal of the developments necessary for both further expanding knowledge of schizophrenia and the translation of new insights into therapeutic innovations.