The ability of XIST to dosage compensate a trisomic autosome presents unique experimental opportunities and potentially transformative therapeutic prospects. However, it is currently thought that XIST requires the natural context surrounding pluripotency to initiate chromosome silencing. Here, we demonstrate that XIST RNA induced in differentiated neural cells can trigger chromosome-wide silencing of chromosome 21 in Down syndrome patient-derived cells. Use of this tightly controlled system revealed a deficiency in differentiation of trisomic neural stem cells to neurons, correctible by inducing XIST at different stages of neurogenesis. Single-cell transcriptomics and other analyses strongly implicate elevated Notch signaling due to trisomy 21, thereby promoting neural stem cell cycling that delays terminal differentiation. These findings have significance for illuminating the epigenetic plasticity of cells during development, the understanding of how human trisomy 21 effects Down syndrome neurobiology, and the translational potential of XIST, a unique non-coding RNA.