The reproducible generation of human-induced pluripotent stem cell (hiPSC)-derived vascular smooth muscle cells (vSMCs) in vitro has been critical to overcoming many limitations of animal and primary cell models of vascular biology and disease. Since this initial advance, research in the field has turned toward recapitulating the naturally occurring subtype specificity found in vSMCs throughout the body, and honing functional models of vascular disease. In this review, we summarize vSMC derivation approaches, including current phenotype and developmental origin-specific methods, and applications of vSMCs in functional disease models and engineered tissues. Further, we discuss the challenges of heterogeneity in hiPSC-derived tissues and propose approaches to identify and isolate vSMC subtype populations.