Background & Aim Recent studies on developing three-dimensional (3D) brain organoids from stem cells allowed us to generate neurodegenerative disease modeling and drug screening. Niemann-pick disease type C1 (NPC) is one of the neurodegenerative diseases having a lysosomal defect. To investigate whether cholesterol accumulation affects neurodevelopment, we generated 3D brain organoids using direct reprogrammed induced neural stem cells (iNSCs) from NPC patients. Methods, Results & Conclusion In the previous study, we have developed induced neural stem cells (iNSCs), which were derived from NPC patients using by direct reprogramming. NPC iNSC showed patient-relevant pathological phenotypes. In this study, we first generate iNSC-derived brain organoids to study pathogenic mechanisms in NPC disease. In comparison to wild-type, NPC brain organoids are significantly reduced in size and proliferation accompanied by cholesterol accumulation, suggesting that NPC organoids can recapitulate the main phenotypes of NPC patients. Impairments in neuronal differentiation and autophagic flux, including malfunction of cholesterol homeostasis, are also observed. Furthermore, valporic acid with known NPC therapeutic effects was treated in NPC organoids for a week and it showed rescues of neuronal differentiation through the regulation of autophagy and cholesterol homeostasis. Our data highlight a 3D brain organoid model including pathological features of NPC disease and application of drug screening platform.