Bipolar disorder (BD) is a common neuropsychiatric disorder characterized by chronic recurrent episodes of depression and mania. Despite evidence for high heritability of BD, little is known about its underlying pathophysiology. To develop new tools for investigating the molecular and cellular basis of BD, we applied a family-based paradigm to derive and characterize a set of 12 induced pluripotent stem cell (iPSC) lines from a quartet consisting of two BD-affected brothers and their two unaffected parents. Initially, no significant phenotypic differences were observed between iPSCs derived from the different family members. However, upon directed neural differentiation, we observed that CXCR4 (CXC chemokine receptor-4) expressing central nervous system (CNS) neural progenitor cells (NPCs) from both BD patients compared with their unaffected parents exhibited multiple phenotypic differences at the level of neurogenesis and expression of genes critical for neuroplasticity, including WNT pathway components and ion channel subunits. Treatment of the CXCR4(+) NPCs with a pharmacological inhibitor of glycogen synthase kinase 3, a known regulator of WNT signaling, was found to rescue a progenitor proliferation deficit in the BD patient NPCs. Taken together, these studies provide new cellular tools for dissecting the pathophysiology of BD and evidence for dysregulation of key pathways involved in neurodevelopment and neuroplasticity. Future generation of additional iPSCs following a family-based paradigm for modeling complex neuropsychiatric disorders in conjunction with in-depth phenotyping holds promise for providing insights into the pathophysiological substrates of BD and is likely to inform the development of targeted therapeutics for its treatment and ideally prevention.