Zinc finger protein of the cerebellum (Zic)3, a member of Gli family of transcription factors (TFs), is essential for maintaining pluripotency of embryonic stem cells (ESCs) and has been reported to activate TF Nanog in an Oct4/Sox2-independent manner. Previously, we showed that Zic3 (Z), in combination with the Yamanka factors OCT4, SOX2, and KLF4 (OSK), induces neural progenitor-like cells from human fibroblasts. However, a similar combination of TFs (OSKZ) transduced in mouse embryonic fibroblasts resulted in enhanced induced pluripotent stem cells (iPSCs) formation compared with OSK alone, but not neuroprogenitors. OSKZ-derived iPSCs are indistinguishable from mESCs in colony morphology, expression of alkaline phosphatase and pluripotency genes, and embryoid body and teratoma formation. Zic3 activates the transcription of Nanog, a key pluripotency regulator, as evidenced by a luciferase promoter assay. During the course of iPSC derivation, Zic3-mediated enhanced expression of Nanog and Tbx3, gene known to enhance iPSCs derivation, is observed. Not only does Zic3 enhance the reprogramming efficiency, but also reactivation of the endogenous Zic3 protein is essential for the generation of iPSCs, as knockdown of Zic3 during the iPSC generation with OSKM significantly reduced the number of colonies. Together, our result uncovers an important role of Zic3 in generating mouse iPSCs.