The truncated mutant form of the charged multivesicular body protein 2B (CHMP2B) is causative for frontotemporal dementia linked to chromosome 3 (FTD3). CHMP2B is a constituent of the endosomal sorting complex required for transport (ESCRT) and, when mutated, disrupts endosome-to-lysosome trafficking and substrate degradation. To understand the underlying molecular pathology, FTD3 patient induced pluripotent stem cells (iPSCs) were differentiated into forebrain-type cortical neurons. FTD3 neurons exhibited abnormal endosomes, as previously shown in patients. Moreover, mitochondria of FTD3 neurons displayed defective cristae formation, accompanied by deficiencies in mitochondrial respiration and increased levels of reactive oxygen. In addition, we provide evidence for perturbed iron homeostasis, presenting an in vitro patient-specific model to study the effects of iron accumulation in neurodegenerative diseases. All phenotypes observed in FTD3 neurons were rescued in CRISPR/Cas9-edited isogenic controls. These findings illustrate the relevance of our patient-specific in vitro models and open up possibilities for drug target development.