Multiple system atrophy of the parkinsonian type (MSA-P) is a rare, fatal neurodegenerative disease with sporadic onset. It is still unknown if MSA-P is a primary oligodendropathy or caused by neuronal pathophysiology leading to severe, α-synuclein-associated neurodegeneration, mainly in the striatum. In this study, we generated and differentiated induced pluripotent stem cells (iPSCs) from patients with the clinical diagnosis of probable MSA-P (n = 3) and from three matched healthy controls into GABAergic striatal medium spiny neurons (MSNs). We found a significantly elevated release and neuronal distribution for α-synuclein, as well as hypoexcitability in the MSNs derived from the MSA-P patients compared to the healthy controls. These data suggest that the striatal hypoexcitable neurons of MSA-P patients contribute to a pathological α-synuclein burden which is likely to spread to neighboring cells and projection targets, facilitating disease progression.