Natural killer (NK) cells are increasingly recognised as potent tumoricidal agents that can be utilised for cancer immunotherapy. Their innate cytotoxicity against tumor cells, and reduced risk of causing transplantation or toxicity issues in patients, makes them a valuable option for exploration in allogeneic adoptive cell immunotherapies. However, sourcing NK cells from peripheral blood poses challenges in terms of scalability, consistency and variability. Induced pluripotent stem cells (iPSCs) are emerging as a platform to create specific cells with highly controlled processes, allowing for a common cell source for cell therapies and offering a promising inexhaustible source of genetically modifiable NK cells. This review highlights recent developments in the field of generating iPSC-derived NK cells in defined culture systems, and advancements in genetic modification to improve iPSC-NK cell therapy. We further discuss the development of iPSC banks and examine the potential of these cells in next-generation immunotherapies. Finally, we summarise the improvements in cancer targeting, expansion, persistence and cytotoxic functionality of iPSC-derived NK (iNK) cells both in vitro and in vivo, achieved through genetic modification of iPSCs, as well as recent related clinical trials.