Human pluripotent stem cells (hPSCs) are increasingly used to model human disease and as donor cells for regenerative medicine. However, the fidelity of hPSC-derived cell types remains a major concern, particularly when these cells are intended to replicate complex or region-specific subtypes, such as those required to explore and treat neurological diseases. Medium spiny neurons (MSNs), the principal projection neurons of the striatum, are one such target cell type relevant to disorders such as Huntington's disease. While protocols for generating hPSC-derived MSNs (hPSC-MSNs) exist, the extent to which these cells faithfully recapitulate their genuine counterparts is unclear. Here, we generated isogenic human induced pluripotent stem cells (hiPSCs) from striatal (LGE) and non-neural (fibroblast) fetal tissues, and differentiated them into MSN-like cells alongside a naive human embryonic stem cell (hESC) line. Using DNA methylation profiling and single-cell RNA sequencing, we systematically compared the epigenetic and transcriptional features of these hPSC-MSNs to authentic fetal MSNs. Our findings reveal persistent epigenetic signatures inherited from the tissue of origin, which influence differentiation outcomes. While LGE-derived hiPSCs retained elements of a striatal-biased methylome and yielded MSN-like cells with enhanced similarity to authentic MSNs, all hPSC-MSNs remained epigenetically and transcriptionally distinct from genuine MSNs and we identified clusters of hPSC-derived cells with aberrant or incomplete phenotypes. These results demonstrate that even isogenic hiPSC lines exhibit variable differentiation potential due to residual epigenetic memory and protocol compatibility. We highlight the need for refined protocols and rigorous benchmarking of hPSC-derived models, particularly for regionally specified neuronal subtypes. Our study underscores the complex relationship between epigenetic status, cell lineage, protocol adaptation, and differentiation outcome.