DNAJC6 encodes auxilin, a co-chaperone protein involved in clathrin-mediated endocytosis (CME) at the presynaptic terminal. Biallelic mutations in DNAJC6 cause a complex, early-onset neurodegenerative disorder characterized by rapidly progressive parkinsonism-dystonia in childhood. The disease is commonly associated with additional neurodevelopmental, neurological and neuropsychiatric features. Currently, there are no disease-modifying treatments for this condition, resulting in significant morbidity and risk of premature mortality. To investigate the underlying disease mechanisms in childhood-onset DNAJC6 parkinsonism, we generated induced pluripotent stem cells (iPSC) from three patients harbouring pathogenic loss-of-function DNAJC6 mutations and subsequently developed a midbrain dopaminergic neuronal model of disease. When compared to age-matched and CRISPR-corrected isogenic controls, the neuronal cell model revealed disease-specific auxilin deficiency as well as disturbance of synaptic vesicle recycling and homeostasis. We also observed neurodevelopmental dysregulation affecting ventral midbrain patterning and neuronal maturation. To explore the feasibility of a viral vector-mediated gene therapy approach, iPSC-derived neuronal cultures were treated with lentiviral DNAJC6 gene transfer, which restored auxilin expression and rescued CME. Our patient-derived neuronal model provides deeper insights into the molecular mechanisms of auxilin deficiency as well as a robust platform for the development of targeted precision therapy approaches.