Therapeutic development for human diseases continues to face obstacles, particularly in translating targets or compounds identified by in vitro screening campaigns to valid targets or efficacious and safe compounds once tested in humans. Here we discuss strategies that leverage induced pluripotent stem cells (iPSCs) to increase the relevance of human cell models for these in vitro approaches. We review current advances in genome engineering to pivot from challenges with delivery, identification and selection and subsequent clonal outgrowth by leveraging tools to consistently and reliably generate knock-out and knock-in models for use in target or compound identification. Specifically, we demonstrate this approach with iPSCs to build isogenic disease models, which can be further differentiated to various cell types of interest such as cardiomyocytes and dopaminergic neurons to model disease and are more directly related to a disease area than commonly used immortalized cell lines. We expect strategies combining genome engineering and stem cells to provide platforms for more robust disease models that will provide more predictable translation of in vitro to in vivo results.