Adeno-associated viral (AAV) vector-based gene therapy is gaining foothold as treatment for genetic neurological diseases with encouraging clinical results. Nonetheless, dose-dependent adverse events have emerged in recent clinical trials through mechanisms that remain unclear. We have modelled here the impact of AAV transduction in cell models of the human central nervous system (CNS), taking advantage of induced pluripotent stem cells. Our work uncovers vector-induced innate immune mechanisms that contribute to cell death. While empty AAV capsids were well tolerated, the AAV genome triggered p53-dependent DNA damage responses across CNS cell types followed by the induction of inflammatory responses. In addition, transgene expression led to MAVS-dependent activation of type I interferon responses. Formation of DNA damage foci in neurons and gliosis were confirmed in murine striatum upon intraparenchymal AAV injection. Transduction-induced cell death and gliosis could be prevented by inhibiting p53 or by acting downstream on STING- or IL-1R-mediated responses. Together, our work identifies innate immune mechanisms of vector sensing in the CNS that can potentially contribute to AAV-associated neurotoxicity.