Neural crest cells (NCC) hold great promise for tissue engineering, however the inability to easily obtain large numbers of NCC is a major factor limiting their use in studies of regenerative medicine. Induced pluripotent stem cells (iPSC) are emerging as a novel candidate that could provide an unlimited source of NCC. In the present study, we examined the potential of neural crest tissue‐derived periodontal ligament (PDL) iPSC to differentiate into neural crest‐like cells (NCLC) relative to iPSC generated from a non‐neural crest derived tissue, foreskin fibroblasts (FF). We detected high HNK1 expression during the differentiation of PDL and FF iPSC into NCLC as a marker for enriching for a population of cells with NCC characteristics. We isolated PDL iPSC‐ and FF iPSC‐derived NCLC, which highly expressed HNK1. A high proportion of the HNK1‐positive cell populations generated, expressed the MSC markers, whilst very few cells expressed the pluripotency markers or the hematopoietic markers. The PDL and FF HNK1‐positive populations gave rise to smooth muscle, neural, glial, osteoblastic and adipocytic like cells and exhibited higher expression of smooth muscle, neural, and glial cell‐associated markers than the PDL and FF HNK1‐negative populations. Interestingly, the HNK1‐positive cells derived from the PDL‐iPSC exhibited a greater ability to differentiate into smooth muscle, neural, glial cells and adipocytes, than the HNK1‐positive cells derived from the FF‐iPSC. Our work suggests that HNK1‐enriched NCLC from neural crest tissue‐derived iPSC more closely resemble the phenotypic and functional hallmarks of NCC compared to the HNK1‐low population and non‐neural crest iPSC‐derived NCLC. J. Cell. Physiol. 232: 402–416, 2017. © 2016 Wiley Periodicals, Inc. The aim of this study was to generate the cells that closely resemble the phenotypic and functional hallmarks of neural crest cells using iPSC. We demonstrated that iPSC derived from neural crest lineage cells a greater capacity to differentiate into neural crest‐like cells than iPSC derived from non‐neural crest lineage cells. We suggested that cell sorting using the HNK1 antibody is an efficient method to enrich a population of cells with neural crest cell characteristics.