Neural tube defects (NTDs) are severe congenital abnormalities, caused by failed closure of neural tube during early embryonic development. Periconceptional folic acid (FA) supplementation greatly reduces the risk of NTDs. However, the molecular mechanisms behind NTDs and the preventive role of FA remain unclear. Here, we use human induced pluripotent stem cells (iPSCs) derived from fetuses with spina bifida aperta (SBA) to study the pathophysiology of NTDs and explore the effects of FA exposure. We report that FA exposure in SBA model is necessary for the proper formation and maturation of neural tube structures and robust differentiation of mesodermal derivatives. Additionally, we show that the folate antagonist methotrexate dramatically affects the formation of neural tube structures and FA partially reverts this aberrant phenotype. In conclusion, we present a novel model for human NTDs and provide evidence that it is a powerful tool to investigate the molecular mechanisms underlying NTDs, test drugs for therapeutic approaches. © 2018 The Author(s).