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Abstract Myeloid neoplasms, including myelodysplastic syndromes (MDS), are genetically heterogeneous disorders driven by clonal acquisition of somatic mutations in hematopoietic stem and progenitor cells (HPCs). The order of premalignant mutations and their impact on HPC self-renewal and differentiation remain poorly understood. We show that episomal reprogramming of MDS patient samples generates induced pluripotent stem cells from single premalignant cells with a partial complement of mutations, directly informing the temporal order of mutations in the individual patient. Reprogramming preferentially captured early subclones with fewer mutations, which were rare among single patient cells. To evaluate the functional impact of clonal evolution in individual patients, we differentiated isogenic MDS induced pluripotent stem cells harboring up to 4 successive clonal abnormalities recapitulating a progressive decrease in hematopoietic differentiation potential. SF3B1, in concert with epigenetic mutations, perturbed mitochondrial function leading to accumulation of damaged mitochondria during disease progression, resulting in apoptosis and ineffective erythropoiesis. Reprogramming also informed the order of premalignant mutations in patients with complex karyotype and identified 5q deletion as an early cytogenetic anomaly. The loss of chromosome 5q cooperated with TP53 mutations to perturb genome stability, promoting acquisition of structural and karyotypic abnormalities. Reprogramming thus enables molecular and functional interrogation of preleukemic clonal evolution, identifying mitochondrial function and chromosome stability as key pathways affected by acquisition of somatic mutations in MDS.