Many current cellular models aimed at elucidating cancer biology do not recapitulate pathobiology including tumor heterogeneity, an inherent feature of cancer that underlies treatment resistance. Here we introduce a new cancer modeling paradigm using genetically engineered human pluripotent stem cells (hiPSCs) that capture authentic cancer pathobiology. Orthotopic engraftment of neural progenitor cells derived from hiPSCs that have been genome-edited to contain tumor-associated genetic driver mutations revealed by The Cancer Genome Atlas project for glioblastoma (GBM) result in formation of high-grade gliomas. As observed in GBM patient samples, these models harbor inter-tumor heterogeneity resembling different GBM molecular subtypes, and intra-tumor heterogeneity. Further, re-engraftment of primary tumor neurospheres generates secondary tumors with features characteristic of patient samples and present mutation-dependent patterns of tumor evolution. Thus, these cancer avatar models provide a platform for a comprehensive longitudinal assessment of human tumor development as governed by molecular subtype mutations and lineage-restricted differentiation.