Background: Tay-Sachs disease (TSD) is a rare neurodegenerative disorder caused by autosomal recessive mutations in the HEXA gene on chromosome 15 that encodes β-hexosaminidase. Deficiency in HEXA results in accumulation of GM2 ganglioside, a glycosphingolipid, in lysosomes. Currently, there is no effective treatment for TSD. Results: We generated induced pluripotent stem cells (iPSCs) from two TSD patient dermal fibroblast lines and further differentiated them into neural stem cells (NSCs). The TSD neural stem cells exhibited a disease phenotype of lysosomal lipid accumulation. The Tay-Sachs disease NSCs were then used to evaluate the therapeutic effects of enzyme replacement therapy (ERT) with recombinant human Hex A protein and two small molecular compounds: hydroxypropyl-β-cyclodextrin (HPβCD) and δ-tocopherol. Using this disease model, we observed reduction of lipid accumulation by employing enzyme replacement therapy as well as by the use of HPβCD and δ-tocopherol. Conclusion: Our results demonstrate that the Tay-Sachs disease NSCs possess the characteristic phenotype to serve as a cell-based disease model for study of the disease pathogenesis and evaluation of drug efficacy. The enzyme replacement therapy with recombinant Hex A protein and two small molecules (cyclodextrin and tocopherol) significantly ameliorated lipid accumulation in the Tay-Sachs disease cell model. © 2018 The Author(s).