Pancreatic ductal adenocarcinoma (PDAC) carries a dismal prognosis and lacks a human cell model of early disease progression. When human PDAC cells are injected into immunodeficient mice, they generate advanced-stage cancer. We hypothesized that if human PDAC cells were converted to pluripotency and then allowed to differentiate back into pancreatic tissue, they might undergo early stages of cancer. Although most induced pluripotent stem cell (iPSC) lines were not of the expected cancer genotype, one PDAC line, 10–22 cells, when injected into immunodeficient mice, generated pancreatic intraepithelial neoplasia (PanIN) precursors to PDAC that progressed to the invasive stage. The PanIN-like cells secrete or release proteins from many genes that are known to be expressed in human pancreatic cancer progression and that predicted an HNF4α network in intermediate-stage lesions. Thus, rare events allow iPSC technology to provide a live human cell model of early pancreatic cancer and insights into disease progression.