Schizophrenia (SZ) is a severe psychiatric disorder, with a prevalence of 1–2% world-wide and substantial health- and social care costs. The pathology is influenced by both genetic and environmental factors, however the underlying cause still remains elusive. SZ has symptoms including delusions, hallucinations, confused thoughts, diminished emotional responses, social withdrawal and anhedonia. The onset of psychosis is usually in late adolescence or early adulthood. Multiple genome-wide association and whole exome sequencing studies have provided extraordinary insights into the genetic variants underlying familial as well as polygenic forms of the disease. Nonetheless, a major limitation in schizophrenia research remains the lack of clinically relevant animal models, which in turn hampers the development of novel effective therapies for the patients. The emergence of human induced pluripotent stem cell (hiPSC) technology has allowed researchers to work with SZ patient-derived neuronal and glial cell types in vitro and to investigate the molecular basis of the disorder in a human neuronal context. In this review, we summarise findings from available studies using hiPSC-based neural models and discuss how these have provided new insights into molecular and cellular pathways of SZ. Further, we highlight different examples of how these models have shown alterations in neurogenesis, neuronal maturation, neuronal connectivity and synaptic impairment as well as mitochondrial dysfunction and dysregulation of miRNAs in SZ patient-derived cultures compared to controls. We discuss the pros and cons of these models and describe the potential of using such models for deciphering the contribution of specific human neural cell types to the development of the disease.