Sialidosis, caused by a genetic deficiency of the lysosomal sialidase gene (NEU1), is a systemic disease involving various tissues and organs, including the nervous system. Understanding the neurological dysfunction and pathology associated with sialidosis remains a challenge, partially due to the lack of a human model system. In this study, we have generated two types of induced pluripotent stem cells (iPSCs) with sialidosis-specific NEU1G227R and NEU1V275A/R347Q mutations (sialidosis-iPSCs), and further differentiated them into neural precursor cells (iNPCs). Characterization of NEU1G227R- and NEU1V275A/R347Q- mutated iNPCs derived from sialidosis-iPSCs (sialidosis-iNPCs) validated that sialidosis-iNPCs faithfully recapitulate key disease-specific phenotypes, including reduced NEU1 activity and impaired lysosomal and autophagic function. In particular, these cells showed defective differentiation into oligodendrocytes and astrocytes, while their neuronal differentiation was not notably affected. Importantly, we found that the phenotypic defects of sialidosis-iNPCs, such as impaired differentiation capacity, could be effectively rescued by the induction of autophagy with rapamycin. Our results demonstrate the first use of a sialidosis-iNPC model with NEU1G227R- and NEU1V275A/R347Q- mutation(s) to study the neurological defects of sialidosis, particularly those related to a defective autophagy–lysosome pathway, and may help accelerate the development of new drugs and therapeutics to combat sialidosis and other LSDs.