Donor-independent platelet concentrates for transfusion can be produced in vitro from induced pluripotent stem cells (iPSCs). However, culture at 37°C induces ectodomain shedding on platelets of glycoprotein Ibα (GPIbα), the von Willebrand factor receptor critical for adhesive function and platelet lifetime in vivo, through temperature-dependent activation of a disintegrin and metalloproteinase 17 (ADAM17). The shedding can be suppressed by using inhibitors of panmetalloproteinases and possibly of the upstream regulator p38 mitogen-activated protein kinase (p38 MAPK), but residues of these inhibitors in the final platelet products may be accompanied by harmful risks that prevent clinical application. Here, we optimized the culture conditions for generating human iPSC-derived GPIbα+ platelets, focusing on culture temperature and additives, by comparing a new and safe selective ADAM17 inhibitor, KP-457, with previous inhibitors. Because cultivation at 24°C (at which conventional platelet concentrates are stored) markedly diminished the yield of platelets with high expression of platelet receptors, 37°C was requisite for normal platelet production from iPSCs. KP-457 blocked GPIbα shedding from iPSC platelets at a lower half-maximal inhibitory concentration than panmetalloproteinase inhibitor GM-6001, whereas p38 MAPK inhibitors did not. iPSC platelets generated in the presence of KP-457 exhibited improved GPIbα-dependent aggregation not inferior to human fresh platelets. A thrombus formation model using immunodeficient mice after platelet transfusion revealed that iPSC platelets generated with KP-457 exerted better hemostatic function in vivo. Our findings suggest that KP-457, unlike GM-6001 or p38 MAPK inhibitors, effectively enhances the production of functional human iPSC-derived platelets at 37°C, which is an important step toward their clinical application. Stem Cells Translational Medicine 2017;6:720-730.