Human cellular models of Alzheimer's disease (AD) pathogenesis would enable the investigation of candidate pathogenic mechanisms in AD and the testing and developing of new therapeutic strategies. We report the development of AD pathologies in cortical neurons generated from human induced pluripotent stem (iPS) cells derived from patients with Down syndrome. Adults with Down syndrome (caused by trisomy of chromosome 21) develop early-onset AD, probably due to increased expression of a gene on chromosome 21 that encodes the amyloid precursor protein (APP). We found that cortical neurons generated from iPS cells and embryonic stem cells from Down syndrome patients developed AD pathologies over months in culture, rather than years in vivo. These cortical neurons processed the transmembrane APP protein, resulting in secretion of the pathogenic peptide fragment amyloid-β42 (Aβ42), which formed insoluble intracellular and extracellular amyloid aggregates. Production of Aβ peptides was blocked by a γ-secretase inhibitor. Finally, hyperphosphorylated tau protein, a pathological hallmark of AD, was found to be localized to cell bodies and dendrites in iPS cell-derived cortical neurons from Down syndrome patients, recapitulating later stages of the AD pathogenic process.