Presenilin 1 (PSEN1) encodes the catalytic subunit of γ-secretase, and PSEN1 mutations are the most common cause of early onset familial Alzheimer's disease (FAD). In order to elucidate pathways downstream of PSEN1, we characterized neural progenitor cells (NPCs) derived from FAD mutant PSEN1 subjects. Thus, we generated induced pluripotent stem cells (iPSCs) from affected and unaffected individuals from two families carrying PSEN1 mutations. PSEN1 mutant fibroblasts, and NPCs produced greater ratios of Aβ42 to Aβ40 relative to their control counterparts, with the elevated ratio even more apparent in PSEN1 NPCs than in fibroblasts. Molecular profiling identified 14 genes differentially-regulated in PSEN1 NPCs relative to control NPCs. Five of these targets showed differential expression in late onset AD/Intermediate AD pathology brains. Therefore, in our PSEN1 iPSC model, we have reconstituted an essential feature in the molecular pathogenesis of FAD, increased generation of Aβ42/40, and have characterized novel expression changes.