Chemotherapy-induced peripheral neuropathy (CIPN) is a dose-limiting adverse event associated with treatment with paclitaxel and other chemotherapeutic agents. The prevention and treatment of CIPN are limited by a lack of understanding of the molecular mechanisms underlying this toxicity. In the current study, a human induced pluripotent stem cell–derived sensory neuron (iPSC-SN) model was developed for the study of chemotherapy-induced neurotoxicity. The iPSC-SNs express proteins characteristic of nociceptor, mechanoreceptor, and proprioceptor sensory neurons and show Ca2+ influx in response to capsaicin, α,β-meATP, and glutamate. The iPSC-SNs are relatively resistant to the cytotoxic effects of paclitaxel, with half-maximal inhibitory concentration (IC50) values of 38.1 µM (95% confidence interval (CI) 22.9–70.9 µM) for 48-hour exposure and 9.3 µM (95% CI 5.7–16.5 µM) for 72-hour treatment. Paclitaxel causes dose-dependent and time-dependent changes in neurite network complexity detected by βIII-tubulin staining and high content imaging. The IC50 for paclitaxel reduction of neurite area was 1.4 µM (95% CI 0.3–16.9 µM) for 48-hour exposure and 0.6 µM (95% CI 0.09–9.9 µM) for 72-hour exposure. Decreased mitochondrial membrane potential, slower movement of mitochondria down the neurites, and changes in glutamate-induced neuronal excitability were also observed with paclitaxel exposure. The iPSC-SNs were also sensitive to docetaxel, vincristine, and bortezomib. Collectively, these data support the use of iPSC-SNs for detailed mechanistic investigations of genes and pathways implicated in chemotherapy-induced neurotoxicity and the identification of novel therapeutic approaches for its prevention and treatment.