Presenilin 1 (PSEN1) is the most frequently mutated gene in early-onset sporadic and familial Alzheimer’s disease (FAD). The PSEN1 complex displays gamma-secretase activity and promotes cleavage of the C99-terminal fragment of the Amyloid Precursor Protein (APP) into the Aβ42 peptide. PSEN1 is also involved in vesicle transport across ER and mitochondria in so called mitochondria associated membranes. We generated induced pluripotent stem cells (iPSCs) from 4 controls and 5 FAD cases carrying the PSEN1 A246E and L286V mutations. Unexpectedly, global gene expression profile analysis of FAD iPSCs revealed profound perturbation of mitochondrial, Golgi apparatus and ER pathways. FAD iPSCs grown slower and showed elevated cell death together with abnormally high Aβ42 secretion. Mitochondrial reactive oxygen species (ROS) were elevated in FAD iPSCs and treatment with a ROS scavenger significantly improved cell death and proliferation. However, it could not improve the severe ATP deficit. Inhibition of gamma-secretase activity further exacerbated the overall FAD iPSC phenotype. Consistently, PSEN1, APP and Nicastrin were highly expressed in iPSCs and where PSEN1 localized to the cell’s membrane. Cortical neurons produced from the differentiation of FAD iPSCs showed Alzheimer’s pathology and TGFβ pathway hyper-activation. PSEN1-mutant iPSCs may serve as a new model to perform genome-wide genetic screens and to study FAD pathophysiology and PSEN1 cellular function.