Acquiring sufficient amounts of high-quality cells remains an impediment to cell-based therapies. Induced pluripotent stem cells (iPSC) may be an unparalleled source, but autologous iPSC likely retain deficiencies requiring correction. We present a strategy for restoring physiological function in genetically deficient iPSC utilizing the low-density lipoprotein receptor (LDLR) deficiency Familial Hypercholesterolemia (FH) as our model. FH fibroblasts were reprogrammed into iPSC using synthetic modified mRNA. FH-iPSC exhibited pluripotency and differentiated toward a hepatic lineage. To restore LDLR endocytosis, FH-iPSC were transfected with a 31 kb plasmid (pEHZ-LDLR-LDLR) containing a wild-type LDLR (FH-iPSC-LDLR) controlled by 10 kb of upstream genomic DNA as well as Epstein-Barr sequences (EBNA1 and oriP) for episomal retention and replication. After six months of selective culture, pEHZ-LDLR-LDLR was recovered from FH-iPSC-LDLR and transfected into Ldlr-deficient CHO-a7 cells, which then exhibited feedback-controlled LDLR-mediated endocytosis. To quantify endocytosis, FH-iPSC ± LDLR were differentiated into mesenchymal cells (MC), pretreated with excess free sterols, Lovastatin, or ethanol (control), and exposed to DiI-LDL. FH-MC-LDLR demonstrated a physiological response, with virtually no DiI-LDL internalization with excess sterols and an ~2-fold increase in DiI-LDL internalization by Lovastatin compared to FH-MC. These findings demonstrate the feasibility of functionalizing genetically deficient iPSC using episomal plasmids to deliver physiologically responsive transgenes.