The equivalency of human induced pluripotent stem cells (hiPSCs) with human embryonic stem cells (hESCs) remains controversial. Here, we devised a strategy to assess the contribution of clonal growth, reprogramming method and genetic background to transcriptional patterns in hESCs and hiPSCs. Surprisingly, transcriptional variation originating from two different genetic backgrounds was dominant over variation due to the reprogramming method or cell type of origin of pluripotent cell lines. Moreover, the few differences we detected between isogenic hESCs and hiPSCs neither predicted functional outcome, nor distinguished an independently derived, larger set of unmatched hESC/hiPSC lines. We conclude that hESCs and hiPSCs are transcriptionally and functionally highly similar and cannot be distinguished by a consistent gene expression signature. Our data further imply that genetic background variation is a major confounding factor for transcriptional comparisons of pluripotent cell lines, explaining some of the previously observed expression differences between unmatched hESCs and hiPSCs. Overall design: Expression profiling of human embryonic stem cells (ESCs), induced pluripotent stem cells (iPSCs) and fibroblasts, mostly in triplicates.