Pluripotent stem cells are a potential source of autologous cells for cell and tissue regenerative therapies. They have the ability to renew indefinitely while retaining the capacity to differentiate into all cell types in the body. With developments in cell therapy and tissue engineering these cells may provide an option for treating tissue loss in organs which do not repair themselves. Limitations to clinical translation of pluripotent stem cells include poor cell survival and low cell engraftment in vivo and the risk of teratoma formation when the cells do survive through implantation. In this study, implantation of human induced-pluripotent stem (hiPS) cells, suspended in Matrigel, into an in vivo vascularized tissue engineering chamber in nude rats resulted in substantial engraftment of the cells into the highly vascularized rat tissues formed within the chamber. Differentiation of cells in the chamber environment was shown by teratoma formation, with all three germ lineages evident within 4. weeks. The rate of teratoma formation was higher with partially differentiated hiPS cells (as embryoid bodies) compared to undifferentiated hiPS cells (100% versus 60%). In conclusion, the in vivo vascularized tissue engineering chamber supports the survival through implantation of human iPS cells and their differentiated progeny, as well as a novel platform for rapid teratoma assay screening for pluripotency.