Vascular smooth muscle cells (VSMCs) play a role in the development of vascular disease, for example, neointimal formation, arterial aneurysm, and Marfan syndrome caused by genetic mutations in VSMCs, but little is known about the mechanisms of the disease process. Advances in induced pluripotent stem cell technology have now made it possible to derive VSMCs from several different somatic cells using a selection of protocols. As such, researchers have set out to delineate key signaling processes involved in triggering VSMC gene expression to grasp the extent of gene regulatory networks involved in phenotype commitment. This technology has also paved the way for investigations into diseases affecting VSMC behavior and function, which may be treatable once an identifiable culprit molecule or gene has been repaired. Moreover, induced pluripotent stem cell-derived VSMCs are also being considered for their use in tissue-engineered blood vessels as they may prove more beneficial than using autologous vessels. Finally, while several issues remains to be clarified before induced pluripotent stem cell-derived VSMCs can become used in regenerative medicine, they do offer both clinicians and researchers hope for both treating and understanding vascular disease. In this review, we aim to update the recent progress on VSMC generation from stem cells and the underlying molecular mechanisms of VSMC differentiation. We will also explore how the use of induced pluripotent stem cell-derived VSMCs has changed the game for regenerative medicine by offering new therapeutic avenues to clinicians, as well as providing researchers with a new platform for modeling of vascular disease.