Derivation of human hematopoietic stem cells (HSCs) from induced pluripotent stem cells (iPSCs) offers considerable promise for cell therapy, disease modeling, and drug screening. However, efficient derivation of functional iPSC-derived HSCs with in vivo engraftability and multilineage potential remains challenging. Here, we demonstrate a tractable approach for respecifying iPSC-derived blood cells into highly engraftable hematopoietic stem and progenitor cells (HSPCs) through transient expression of a single transcription factor, MLL-AF4 These induced HSPCs (iHSPCs) derived from iPSCs are able to fully reconstitute the human hematopoietic system in the recipient mice without myeloid bias. iHSPCs are long-term engraftable, but they are also prone to leukemic transformation during the long-term engraftment period. On the contrary, primary HSPCs with the same induction sustain the long-term engraftment without leukemic transformation. These findings demonstrate the feasibility of activating the HSC network in human iPSC-derived blood cells through expression of a single factor and suggest iHSPCs are more genomically instable than primary HSPCs, which merits further attention.