Huntington's disease (HD) is a neurodegenerative disorder caused by an expansion of CAG repeats in exon 1 of the HTT gene, ultimately resulting in the generation of a mutant HTT (mHTT) protein. Although mHTT is expressed in various tissues, it significantly affects medium spiny neurons (MSNs) in the striatum, resulting in their loss and subsequent motor function impairment in HD. While HD symptoms typically emerge in midlife, disrupted MSN neurodevelopment has an important role. To explore the effects of mHTT on MSN development, we differentiated HD induced pluripotent stem cells (iPSC) and isogenic controls into neuronal stem cells, and then generated a developing MSN population encompassing early, intermediate progenitors, and mature MSNs. Single-cell RNA sequencing revealed that the developmental trajectory of MSNs in our model closely emulated the trajectory of fetal striatal neurons. However, in the HD MSN cultures, the differentiation process downregulated several crucial genes required for proper MSN maturation, including Achaete-scute homolog 1 and members of the DLX family of transcription factors. Our analysis also uncovered a progressive dysregulation of multiple HD-related pathways as the MSNs matured, including the NRF2-mediated oxidative stress response and mitogen-activated protein kinase signaling. Using the transcriptional profile of developing HD MSNs, we searched the L1000 dataset for small molecules that induce the opposite gene expression pattern. Our analysis pinpointed numerous small molecules with known benefits in HD models, as well as previously untested novel molecules. A top novel candidate, Cerulenin, partially restored the DARPP-32 levels and electrical activity in HD MSNs, and also modulated genes involved in multiple HD-related pathways.