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Abstract Down syndrome (trisomy 21) is the most common viable chromosomal disorder with intellectual impairment and several other developmental abnormalities. Here, we report the generation and characterization of induced pluripotent stem cells (iPSCs) derived from monozygotic twins discordant for trisomy 21 in order to eliminate the effects of the variability of genomic background. The alterations observed by genetic analysis at the iPSC level and at first approximation in early development illustrate the developmental disease transcriptional signature of Down syndrome. Moreover, we observed an abnormal neural differentiation of Down syndrome iPSCs in vivo when formed teratoma in NOD‐SCID mice, and in vitro when differentiated into neuroprogenitors and neurons. These defects were associated with changes in the architecture and density of neurons, astroglial and oligodendroglial cells together with misexpression of genes involved in neurogenesis, lineage specification and differentiation. Furthermore, we provide novel evidence that dual‐specificity tyrosine‐(Y)‐phosphorylation regulated kinase 1A (DYRK1A) on chromosome 21 likely contributes to these defects. Importantly, we found that targeting DYRK1A pharmacologically or by shRNA results in a considerable correction of these defects.