Many neurodegenerative diseases are progressive, complex diseases without clear mechanisms or effective treatments. To study the mechanisms underlying these diseases and to develop treatment strategies, a reliable in vitro modeling system is critical. Induced pluripotent stem cells (iPSCs) have the ability to self-renew and possess the differentiation potential to become any kind of adult cell; thus, they may serve as a powerful material for disease modeling. Indeed, patient cell-derived iPSCs can differentiate into specific cell lineages that display the appropriate disease phenotypes and vulnerabilities. In this review, we highlight neuronal differentiation methods and the current development of iPSC-based neurodegenerative disease modeling tools for mechanism study and drug screening, with a discussion of the challenges and future inspiration for application.