Neural progenitors differentiated from induced pluripotent stem cells (iPS) hold potentials for treating neurological diseases. Serotonin has potent effects on neuronal functions through multiple receptors, underlying a variety of neural disorders. Glutamate and GABA receptors have been proven functional in neurons differentiated from iPS, however, little is known about 5-HT receptor-mediated modulation in such neuronal networks. In the present study, human iPS were differentiated into cells possessing featured physiological properties of cortical neurons. Whole-cell patch-clamp recording was used to examine the involvement of 5-HT2 receptors in functional modulation of GABAergic synaptic transmission. We found that serotonin and DOI (a selective agonist of 5-HT2A/C receptor) reversibly reduced GABA-activated currents, and this 5-HT2A/C receptor mediated inhibition required G protein, PLC, PKC, and Ca(2+) signaling. Serotonin increased the frequency of miniature inhibitory postsynaptic currents (mIPSCs), which could be mimicked by α-methylserotonin, a 5-HT2 receptor agonist. In contrast, DOI reduced both frequency and amplitude of mIPSCs. These findings suggested that in iPS-derived human neurons serotonin postsynaptically reduced GABAa receptor function through 5-HT2A/C receptors, but presynaptically other 5-HT2 receptors counteracted the action of 5-HT2A/C receptors. Functional expression of serotonin receptors in human iPS-derived neurons provides a pre-requisite for their normal behaviors after grafting.