Proximal spinal muscular atrophy (SMA) is an early onset, autosomal recessive motor neuron disease caused by loss of or mutation in SMN1 (survival motor neuron 1). Despite understanding the genetic basis underlying this disease, it is still not known why motor neurons (MNs) are selectively affected by the loss of the ubiquitously expressed SMN protein. Using a mouse embryonic stem cell (mESC) model for severe SMA, the RNA transcript profiles (transcriptomes) between control and severe SMA (SMN2+/+;mSmn-/-) mESC-derived MNs were compared in this study using massively parallel RNA sequencing (RNA-Seq). The MN differentiation efficiencies between control and severe SMA mESCs were similar. RNA-Seq analysis identified 3,094 upregulated and 6,964 downregulated transcripts in SMA mESC-derived MNs when compared against control cells. Pathway and network analysis of the differentially expressed RNA transcripts showed that pluripotency and cell proliferation transcripts were significantly increased in SMA MNs while transcripts related to neuronal development and activity were reduced. The differential expression of selected transcripts such as Crabp1, Crabp2 and Nkx2.2 was validated in a second mESC model for SMA as well as in the spinal cords of low copy SMN2 severe SMA mice. Furthermore, the levels of these selected transcripts were restored in high copy SMN2 rescue mouse spinal cords when compared against low copy SMN2 severe SMA mice. These findings suggest that SMN deficiency affects processes critical for normal development and maintenance of MNs.