Human pluripotent stem cell (hPSC)-based modeling offers the potential for studying human diseases using human systems. An increasing number of studies in numerous fields demonstrate that hPSC-based disease systems capture disease specific pathophysiology occurring in vivo. A widespread deployment of hPSC systems is foreseeable. Even the field of psychiatric disorders (for example, schizophrenia and autism), which lags behind due to complex underlying causes, such as the inaccessibility of brain cells for assessments and the absence of reliable models, has been embracing the hPSC-based disease system. However, despite hPSCs holding great potential, it is imperative to validate how faithful hPSC-based neural developmental modeling is in recapitulating the developmental process in vivo. Our recent study demonstrated that the hPSC-based system mimicked the process of neural development and the system reserved neural stem cell (NSC) niches similar to those residing in the ventricular region of the cortex. In this article, we will first comment on an array of factors that affect hPSC-based neural differentiation and summarize the intricate regulatory signaling pathways that regionalize neuronal cell types. Finally, we review successful studies in brain-related diseases using hPSC-based modeling with 3-D systems.