Nilotinib is a highly effective tyrosine kinase inhibitor used to treat Chronic Myeloid Leukemia (CML). While nilotinib successfully treats CML, a common and serious side effect is development of nilotinib-induced arterial disease (NAD) even in patients without pre-existing risk factors. This side effect is not seen with imatinib, a CML drug in the same class that inhibits the same target as nilotinib. To date, the mechanisms of NAD are unknown, and the cell types involved in this adverse effect have yet to be identified. Furthermore, no tools currently exist to predict which patients will develop NAD. In this study, we used endothelial and vascular smooth cells derived from human-induced pluripotent stem cells (hiPSCs) as a model to identify which cell types are involved in NAD and which cellular functions are perturbed. We first developed a set of efficient, reproducible endothelial and vascular smooth muscle differentiation and purification protocols that consistently yield >95% pure cells. For both hiPSC-derived endothelial cells (hiPSC-ECs) and hiPSC-derived vascular smooth muscle cells (hiPSC-VSMCs) we next identified a panel of assays relevant to various functions of atherogenesis. In comparing the effects of nilotinib and imatinib on hiPSC-ECs, we see a nilotinib-specific decrease in cell capacity for proliferation and migration, in addition to disturbances in Ac-LDL uptake and NO homeostasis. Nilotinib is not differentially toxic to hiPSC-ECs compared to imatinib and has no effect on barrier function as measured by multielectrode array. The data collected to date demonstrate the feasibility of using hiPSCs to model NAD in vitro and recapitulate the clinical discrepancy in vascular effects between nilotinib and imatinib.