Summary In vitro modeling of human disease has recently become feasible with induced pluripotent stem cell (iPSC) technology. Here, we established patient-derived iPSCs from a Li-Fraumeni syndrome (LFS) family and investigated the role of mutant p53 in the development of osteosarcoma (OS). LFS iPSC-derived osteoblasts (OBs) recapitulated OS features including defective osteoblastic differentiation as well as tumorigenic ability. Systematic analyses revealed that the expression of genes enriched in LFS-derived OBs strongly correlated with decreased time to tumor recurrence and poor patient survival. Furthermore, LFS OBs exhibited impaired upregulation of the imprinted gene H19 during osteogenesis. Restoration of H19 expression in LFS OBs facilitated osteoblastic differentiation and repressed tumorigenic potential. By integrating human imprinted gene network (IGN) into functional genomic analyses, we found that H19 mediates suppression of LFS-associated OS through the IGN component DECORIN (DCN). In summary, these findings demonstrate the feasibility of studying inherited human cancer syndromes with iPSCs.