Friedreich's ataxia (FRDA) is an autosomal recessive neurological disease caused by expansions of guanine-adenine-adenine (GAA) repeats in intron 1 of the frataxin (FXN) gene. The expansion results in significantly decreased frataxin expression. We report that human FRDA cells can be corrected by zinc finger nuclease-mediated excision of the expanded GAA repeats. Editing of a single expanded GAA allele created heterozygous, FRDA carrier-like cells and significantly increased frataxin expression. This correction persisted during reprogramming of zinc finger nuclease-edited fibroblasts to induced pluripotent stem cells and subsequent differentiation into neurons. The expression of FRDA biomarkers was normalized in corrected patient cells and disease-associated phenotypes, such as decreases in aconitase activity and intracellular ATP levels, were reversed in zinc finger nuclease corrected neuronal cells. Genetically and phenotypically corrected patient cells represent not only a preferred disease-relevant model system to study pathogenic mechanisms, but also a critical step towards development of cell replacement therapy.