Microphysiological systems (MPS), or "organ-on-a-chip" platforms, aim to recapitulate in vivo physiology using small-scale in vitro tissue models of human physiology. While significant efforts have been made to create vascularized tissues, most reports utilize primary endothelial cells that hinder reproducibility. In this study, we report the use of human induced pluripotent stem cell-derived endothelial cells (iPS-ECs) in developing three-dimensional (3D) microvascular networks. We established a CDH5-mCherry reporter iPS cell line, which expresses the vascular endothelial (VE)-cadherin fused to mCherry. The iPS-ECs demonstrate physiological functions characteristic of primary endothelial cells in a series of in vitro assays, including permeability, response to shear stress, and the expression of endothelial markers (CD31, von Willibrand factor, and endothelial nitric oxide synthase). The iPS-ECs form stable, perfusable microvessels over the course of 14 days when cultured within 3D microfluidic devices. We also demonstrate that inhibition of TGF-β signaling improves vascular network formation by the iPS-ECs. We conclude that iPS-ECs can be a source of endothelial cells in MPS providing opportunities for human disease modeling and improving the reproducibility of 3D vascular networks.