Arsenic exposure during embryogenesis can lead to improper neurodevelopment and changes in locomotor activity. Additionally, in vitro studies have shown that arsenic inhibits the differentiation of sensory neurons and skeletal muscle. In the current study, human-induced pluripotent stem (iPS) cells were differentiated into motor neurons over 28 days, while being exposed to up to 0.5 μM arsenic. On day 6, neuroepithelial progenitor cells (NEPs) exposed to arsenic had reduced transcript levels of the neural progenitor/stem cell marker nestin () and neuroepithelial progenitor marker , while levels of these transcripts were increased in motor neuron progenitors (MNPs) at day 12. In day 18 early motor neurons (MNs), choline acetyltransferase (CHAT) expression was reduced two-fold in cells exposed to 0.5 μM arsenic. RNA sequencing demonstrated that the cholinergic synapse pathway was impaired following exposure to 0.5 μM arsenic, and that transcript levels of genes involved in acetylcholine synthesis (CHAT), transport (solute carriers, and ) and degradation (acetylcholinesterase, ) were all downregulated in day 18 early MNs. In day 28 mature motor neurons, arsenic significantly downregulated protein expression of microtubule-associated protein 2 (MAP2) and ChAT by 2.8- and 2.1-fold, respectively, concomitantly with a reduction in neurite length. These results show that exposure to environmentally relevant arsenic concentrations dysregulates the differentiation of human iPS cells into motor neurons and impairs the cholinergic synapse pathway, suggesting that exposure impairs cholinergic function in motor neurons.