Different stem cell-based strategies, especially induced pluripotent stem cells (iPSCs), have been exploited to regenerate teeth or restore biological and physiological functions after tooth loss. Further research is needed to establish an optimized protocol to effectively differentiate human iPSCs (hiPSCs) into dental epithelial cells (DECs). In this study, various factors were precisely modulated to facilitate differentiation of hiPSCs into DECs, which are essential for the regeneration of functional teeth. Embryoid bodies (EBs) were formed from hiPSCs as embryo-like aggregates, retinoic acid (RA) was used as an early ectodermal inducer, and bone morphogenic protein 4 (BMP4) activity was manipulated. The characteristics of DECs were enhanced and preserved after culture in keratinocyte serum-free medium (K-SFM). The yielded cell population exhibited noticeable DEC characteristics, consistent with the expression of epithelial cell and ameloblast markers. DECs demonstrated odontogenic abilities by exerting an inductive effect on human dental pulp stem cells (hDPSCs) and forming a tooth-like structure with the mouse tooth mesenchyme. Overall, our differentiation protocol provides a practical approach for applying hiPSCs for tooth regeneration.