Heterozygous mutations in PKD1 or PKD2, which encode polycystin-1 (PC1) and polycystin-2 (PC2), respectively, cause autosomal dominant PKD (ADPKD), whereas mutations in PKHD1, which encodes fibrocystin/polyductin (FPC), cause autosomal recessive PKD (ARPKD). However, the relationship between these proteins and the pathogenesis of PKD remains unclear. To model PKD in human cells, we established induced pluripotent stem (iPS) cell lines from fibroblasts of three ADPKD and two ARPKD patients. Genetic sequencing revealed unique heterozygous mutations in PKD1 of the parental ADPKD fibroblasts but no pathogenic mutations in PKD2. Undifferentiated PKD iPS cells, control iPS cells, and embryonic stem cells elaborated primary cilia and expressed PC1, PC2, and FPC at similar levels, and PKD and control iPS cells exhibited comparable rates of proliferation, apoptosis, and ciliogenesis. However, ADPKD iPS cells as well as somatic epithelial cells and hepatoblasts/biliary precursors differentiated from these cells expressed lower levels of PC2 at the cilium. Additional sequencing confirmed the retention of PKD1 heterozygous mutations in iPS cell lines from two patients but identified possible loss of heterozygosity in iPS cell lines from one patient. Furthermore, ectopic expression of wild-type PC1 in ADPKD iPS-derived hepatoblasts rescued ciliary PC2 protein expression levels, and overexpression of PC1 but not a carboxy-terminal truncation mutant increased ciliary PC2 expression levels in mouse kidney cells. Taken together, these results suggest that PC1 regulates ciliary PC2 protein expression levels and support the use of PKD iPS cells for investigating disease pathophysiology.