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Human induced pluripotent stem cells (hiPSCs) have enormous potential for the treatment of inherited and acquired disorders. Recently, antigen-specific T lymphocytes derived from hiPSCs have been reported. However, T lymphocyte populations with broad T cell receptor (TCR) diversity have not been generated. We report that hiPSCs derived from skin biopsy are capable of producing T lymphocyte populations with a broad TCR repertoire. In vitro T cell differentiation follows a similar developmental program as observed in vivo, indicated by sequential expression of CD7, intracellular CD3 and surface CD3. The γδ TCR locus is rearranged first and is followed by rearrangement of the αβ locus. Both γδ and αβ T cells display a diverse TCR repertoire. Upon activation, the cells express CD25, CD69, cytokines (TNF-α, IFN-γ, IL-2) and cytolytic proteins (Perforin and Granzyme-B). These results suggest that most, if not all, mechanisms required to generate functional T cells with a broad TCR repertoire are intact in our in vitro differentiation protocol. These data provide a foundation for production of patient-specific T cells for the treatment of acquired or inherited immune disorders and for cancer immunotherapy.