Methods for generating induced pluripotent stem cells (iPSCs) for disease modeling and cell therapies have progressed from integrating vectors to transient delivery of reprogramming factors, avoiding permanent genomic modification. A major limitation of unmodified iPSCs is the assessment of their distribution and contribution to adverse reactions in autologous cell therapy. Here, we report that polycistronic lentiviral vectors with single Flp recombinase (Flp) recognition target (FRT) sites can be used to generate murine iPSCs that are devoid of the reprogramming cassette but carry an intergenic 300-bp long terminal repeat sequence. Performing quantitative polymerase chain reaction on this marker, we could determine genetic identity and tissue contribution of iPSC-derived teratomas in mice. Moreover, we generated iPSCs carrying heterospecific FRT twin sites, enabling excision and recombinase-mediated cassette exchange (RMCE) of the reprogramming cassette for another expression unit of choice. Following screening of iPSCs for "safe harbor" integration sites, expression cassettes were introduced by RMCE into various previously silenced loci of selected single-copy iPSCs. Analysis of DNA methylation showed that RMCE reverted the local epigenetic signature, which allowed transgene expression in undifferentiated iPSCs and in differentiated progeny. These findings support the concept of creating clonotypically defined exchangeable and traceable pluripotent stem cells for disease research and cell therapy.Molecular Therapy (2014); doi:10.1038/mt.2014.4.