Pluripotent stem cells (PSCs) hold great promise in regenerative medicine, disease modeling, functional genomics, toxicological studies and cell-based therapeutics due to their unique characteristics of self-renewal and pluripotency. Novel methods for generation of pluripotent stem cells and their differentiation to the specialized cell types such as neuronal cells, myocardial cells, hepatocytes and beta cells of the pancreas and many other cells of the body are constantly being refined. Pluripotent stem cell derived differentiated cells, including neuronal cells or cardiac cells, are ideal for stem cell transplantation as autologous or allogeneic cells from healthy donors due to their minimal risk of rejection. Radiation-induced DNA damage, ultraviolet light, genotoxic stress and other intrinsic and extrinsic factors triggers a series of biochemical reactions known as DNA damage response. To maintain genomic stability and avoid transmission of mutations into progenitors cells, stem cells have robust DNA damage response signaling, a contrast to somatic cells. Stem cell transplantation may protect against radiation-induced late effects. In particular, this review focuses on differential DNA damage response between stem cells and derived differentiated cells and the possible pathways that determine such differences.