The genetic mutation in Friedreich ataxia (FRDA) is a hyperexpansion of the triplet-repeat sequence GAA·TTC within the first intron of the FXN gene. Although yeast and reporter construct models for GAA·TTC triplet-repeat expansion have been reported, studies on FRDA pathogenesis and therapeutic development are limited by the availability of an appropriate cell model in which to study the mechanism of instability of the GAA·TTC triplet repeats in the human genome. Herein, induced pluripotent stem cells (iPSCs) were generated from FRDA patient fibroblasts after transduction with the four transcription factors Oct4, Sox2, Klf4, and c-Myc. These cells were differentiated into neurospheres and neuronal precursors in vitro, providing a valuable cell model for FRDA. During propagation of the iPSCs, GAA·TTC triplet repeats expanded at a rate of about two GAA·TTC triplet repeats/replication. However, GAA·TTC triplet repeats were stable in FRDA fibroblasts and neuronal stem cells. The mismatch repair enzymes MSH2, MSH3, and MSH6, implicated in repeat instability in other triplet-repeat diseases, were highly expressed in pluripotent stem cells compared with fibroblasts and neuronal stem cells and occupied FXN intron 1. In addition, shRNA silencing of MSH2 and MSH6 impeded GAA·TTC triplet-repeat expansion. A specific pyrrole-imidazole polyamide targeting GAA·TTC triplet-repeat DNA partially blocked repeat expansion by displacing MSH2 from FXN intron 1 in FRDA iPSCs. These studies suggest that in FRDA, GAA·TTC triplet-repeat instability occurs in embryonic cells and involves the highly active mismatch repair system.