Persistent inflammation is associated with the poor regeneration of musculoskeletal tissues. Embryonic stem cells (ESCs) have an attenuated response to inflammatory cytokines, but there are mixed reports on the response of induced pluripotent stem cells (iPSCs) to inflammation. Horses provide a relevant large animal model for studying musculoskeletal tissue diseases and the testing of novel therapies. The aim of this study was to determine if equine iPSCs are responsive to the inflammatory cytokines IL-1β, TNFα and IFN-γ in their undifferentiated state, or following differentiation into tendon and cartilage-like cells. We demonstrated that in undifferentiated iPSCs, the cytokines induce NF-κB P65 and STAT1 nuclear translocation which leads to cell death, decreased OCT4 expression and increased expression of inflammatory genes. Following differentiation towards cartilage-like cells exposure to the cytokines resulted in STAT1 nuclear translocation, changes in cartilage gene expression and increased expression of matrix metalloproteinases (MMPs) and inflammatory genes. Exposure of iPSC-derived tendon-like cells to the cytokines resulted nuclear translocation of NF-κB P65 and STAT1, altered tendon gene expression, increased MMP expression and increased expression of inflammatory genes. Equine iPSCs are therefore capable of responding to inflammatory stimulation and this may have relevance for their future clinical application.