Red blood cell (RBC) transfusion is a lifesaving medical procedure that can treat patients with anemia and hemoglobin disorders. However, the shortage of blood supply and risks of transfusion-transmitted infection and immune incompatibility present a challenge for transfusion. The in vitro generation of RBCs or erythrocytes holds great promise for transfusion medicine and novel cell-based therapies. While hematopoietic stem cells and progenitors derived from peripheral blood, cord blood, and bone marrow can give rise to erythrocytes, the use of human pluripotent stem cells (hPSCs) has also provided an important opportunity to obtain erythrocytes. These hPSCs include both human embryonic stem cells (hESCs) and human induced pluripotent stem cells (hiPSCs). As hESCs carry ethical and political controversies, hiPSCs can be a more universal source for RBC generation. In this review, we first discuss the key concepts and mechanisms of erythropoiesis. Thereafter, we summarize different methodologies to differentiate hPSCs into erythrocytes with an emphasis on the key features of human definitive erythroid lineage cells. Finally, we address the current limitations and future directions of clinical applications using hiPSC-derived erythrocytes.