AbstractAlexander disease (AxD) is a rare and severe neurodegenerative disorder caused by mutations in glial fibrillary acidic protein (GFAP). While the exact disease mechanism remains unknown, previous studies suggest that mutant GFAP influences many cellular processes, including cytoskeleton stability, mechanosensing, metabolism, and proteasome function. While most studies have primarily focused on GFAP‐expressing astrocytes, GFAP is also expressed by radial glia and neural progenitor cells, prompting questions about the impact of GFAP mutations on central nervous system (CNS) development. In this study, we observed impaired differentiation of astrocytes and neurons in co‐cultures of astrocytes and neurons, as well as in neural organoids, both generated from AxD patient‐derived induced pluripotent stem (iPS) cells with a GFAPR239C mutation. Leveraging single‐cell RNA sequencing (scRNA‐seq), we identified distinct cell populations and transcriptomic differences between the mutant GFAP cultures and a corrected isogenic control. These findings were supported by results obtained with immunocytochemistry and proteomics. In co‐cultures, the GFAPR239C mutation resulted in an increased abundance of immature cells, while in unguided neural organoids and cortical organoids, we observed altered lineage commitment and reduced abundance of astrocytes. Gene expression analysis revealed increased stress susceptibility, cytoskeletal abnormalities, and altered extracellular matrix and cell–cell communication patterns in the AxD cultures, which also exhibited higher cell death after stress. Overall, our results point to altered cell differentiation in AxD patient‐derived iPS‐cell models, opening new avenues for AxD research.