Abstract Background Rett syndrome (RTT), mainly caused by mutations in methyl-CpG binding protein 2 (MECP2), is one of the most prevalent neurodevelopmental disorders in girls. However, the underlying mechanism of MECP2 remains largely unknown and currently there is no effective treatment available for RTT. Methods We generated MECP2-KO human embryonic stem cells (hESCs), and differentiated them into neurons and cerebral organoids to investigate phenotypes of MECP2 loss-of-function, potential therapeutic agents, and the underlying mechanism by transcriptome sequencing. Results We found that MECP2 deletion caused reduced number of hESCs-derived neurons and simplified dendritic morphology. Moreover, MECP2-KO cortical organoids exhibited fewer neural progenitor cells and neurons at day 60. Electrophysiological recordings showed that MECP2 deletion altered synaptic activity in organoids. Transcriptome analysis of organoids identified many genes in the PI3K-AKT pathway downregulated following MECP2 deletion. Treatment with either KW-2449 or VPA, small molecules for the activation of PI3K-AKT signaling pathway, alleviated neuronal deficits and transcriptome changes in MECP2-KO human neuronal models. Conclusions These findings suggest that KW-2449 and VPA might be promising drugs for RTT treatment.