The nonsense-mediated mRNA decay (NMD) pathway was originally discovered by virtue of its ability to rapidly degrade aberrant mRNAs with premature termination codons. More recently, it was shown that NMD also directly regulates subsets of normal transcripts, suggesting that NMD has roles in normal biological processes. Indeed, several NMD factors have been shown to regulate neurological events (for example, neurogenesis and synaptic plasticity) in numerous vertebrate species. In man, mutations in the NMD factor gene UPF3B, which disrupts a branch of the NMD pathway, cause various forms of intellectual disability (ID). Using Epstein Barr virus—immortalized B cells, also known as lymphoblastoid cell lines (LCLs), from ID patients that have loss-of-function mutations in UPF3B, we investigated the genome-wide consequences of compromised NMD and the role of NMD in neuronal development and function. We found that ~5% of the human transcriptome is impacted in UPF3B patients. The UPF3B paralog, UPF3A, is stabilized in all UPF3B patients, and partially compensates for the loss of UPF3B function. Interestingly, UPF3A protein, but not mRNA, was stabilised in a quantitative manner that inversely correlated with the severity of patients’ phenotype. This suggested that the ability to stabilize the UPF3A protein is a crucial modifier of the neurological symptoms due to loss of UPF3B. We also identified ARHGAP24, which encodes a GTPase-activating protein, as a canonical target of NMD, and we provide evidence that deregulation of this gene inhibits axon and dendrite outgrowth and branching. Our results demonstrate that the UPF3B-dependent NMD pathway is a major regulator of the transcriptome and that its targets have important roles in neuronal cells.