Sporadic mutations in MeCP2 are a hallmark of Rett syndrome (RTT). Many RTT brain organoid models have exhibited pathogenic phenotypes such as decreased spine density and small size of soma with altered electrophysiological signals. However, previous models are mainly focused on the phenotypes observed in the late phase and rarely provide clues for the defect of neural progenitors which generate different types of neurons and glial cells. We newly established the RTT brain organoid model derived from MeCP2-truncated iPS cells which were genetically engineered by CRISPR/Cas9 technology. By immunofluorescence imaging, we studied the development of NPC pool and its fate specification into glutamatergic neurons or astrocytes in RTT organoids. By total RNA sequencing, we investigated which signaling pathways were altered during the early brain development in RTT organoids. Dysfunction of MeCP2 caused the defect of neural rosette formation in the early phase of cortical development. In total transcriptome analysis, BMP pathway-related genes are highly associated with MeCP2 depletion. Moreover, levels of pSMAD1/5 and BMP target genes are excessively increased, and treatment of BMP inhibitors partially rescues the cell cycle progression of neural progenitors. Subsequently, MeCP2 dysfunction reduced the glutamatergic neurogenesis and induced overproduction of astrocytes. Nevertheless, early inhibition of BMP pathway rescued VGLUT1 expression and suppressed astrocyte maturation. Our results demonstrate that MeCP2 is required for the expansion of neural progenitor cells by modulating BMP pathway at early stages of development, and this influence persists during neurogenesis and gliogenesis at later stages of brain organoid development.