Induced pluripotent stem cell (iPSC) provides a promising seeding cell for regenerative medicine. However, iPSC has the potential to form teratomas after transplantation. Therefore, it is necessary to evaluate the tumorigenic risks of iPSC and all its differentiated derivates prior to use in a clinical setting. Here, murine iPSCs were transduced with dual reporter gene consisting of monomeric red fluorescent protein (mRFP) and firefly luciferase (Fluc). Undifferentiated iPSCs, iPSC derivates from induced differentiation (iPSC-derivates), iPSC-derivated cardiomyocyte (iPSC-CMs) were subcutaneously injected into the back of nude mice. Non-invasive bioluminescence imaging (BLI) was longitudinally performed at day 1, 7, 14 and 28 after transplantation to track the survival and proliferation of transplanted cells. At day 28, mice were killed and grafts were explanted to detect teratoma formation. The results demonstrated that transplanted iPSCs, iPSC-derivates and iPSC-CMs survived in receipts. Both iPSCs and iPSC-derivates proliferated dramatically after transplantation, while only slight increase in BLI signals was observed in iPSC-CM transplanted mice. At day 28, teratomas were detected in both iPSCs and iPSC-derivates transplanted mice, but not in iPSC-CM transplanted ones. In vitro study showed the long-term existence of pluripotent cells during iPSC differentiation. Furthermore, when these cells were passaged in feeder layers as undifferentiated iPSCs, they would recover iPSC-like colonies, indicating the cause for differentiated iPSC's tumourigenicity. Our study indicates that exclusion of tumorigenic cells by screening in addition to lineage-specific differentiation is necessary prior to therapeutic use of iPSCs.