Abstract Accurately quantifying gene and isoform expression changes is essential to understanding cell functions, differentiation and disease. Sequencing full-length native RNAs using long-read direct RNA sequencing (DRS) has the potential to overcome many limitations of short and long-read sequencing methods that require RNA fragmentation, cDNA synthesis or PCR. However, there are a lack of tools specifically designed for DRS and its ability to identify differential expression in complex organisms is poorly characterised. We developed NanoCount for fast, accurate transcript isoform quantification in DRS and demonstrate it outperforms similar methods. Using synthetic controls and human SH-SY5Y cell differentiation into neuron-like cells, we show that DRS accurately quantifies RNA expression and identifies differential expression of genes and isoforms. Differential expression of 231 genes, 333 isoforms, plus 27 isoform switches were detected between undifferentiated and differentiated SH-SY5Y cells and samples clustered by differentiation state at the gene and isoform level. Genes upregulated in neuron-like cells were associated with neurogenesis. NanoCount quantification of thousands of novel isoforms discovered with DRS likewise enabled identification of their differential expression. Our results demonstrate enhanced DRS isoform quantification with NanoCount and establish the ability of DRS to identify biologically relevant differential expression of genes and isoforms.