The capability of human pluripotent stem cells (hPSCs) to self-renew and differentiate into any cell type has greatly contributed to the advancement of biomedicine. Reporter lines derived from hPSCs have played a crucial role in elucidating the mechanisms underlying human development and diseases by acting as an alternative reporter system that cannot be used in living humans. To bring hPSCs closer to clinical application in transplantation, scientists have generated reporter lines for isolating the desired cell populations, as well as improving graft quality and treatment outcomes. This review presents an overview of the applications of hPSC reporter lines and the important variables in designing a reporter system, including options for gene delivery and editing tools, design of reporter constructs, and selection of reporter genes. It also provides insights into the prospects of hPSC reporter lines and the challenges that must be overcome to maximize the potential of hPSC reporter lines.