Smith-Magenis syndrome (SMS) is a neurodevelopmental disorder characterized by cognitive and behavioral symptoms, obesity, and sleep disorder. There is no therapy to alleviate symptoms or delay disease onset. SMS is due to the haploinsufficiency of the retinoic-acid-induced-1 gene (RAI1) caused by either chromosomal deletions (SMS-del) or RAI1 missense/nonsense mutations. The molecular mechanisms underlying SMS are not known. Here we generated and characterized primary cells derived from four SMS patients, two carrying the SMS-del, two with RAI1 point mutations, and four control subjects to investigate pathogenetic processes underlying SMS. By combining transcriptomic and lipidomic analyses, we show altered expression of lipid and lysosomal genes, deregulation of lipid metabolism, accumulation of lipid droplets, and a block of autophagy flux. SMS cells show increased cell death associated with mitochondrial pathology and reactive oxygen species production. Treatment with N-acetyl-cysteine reduces cell death and lipid accumulation, suggesting a causative link between metabolic dyshomeostasis and cell viability. Our results highlight pathological processes in human SMS cells involving lipid metabolism, autophagy defects and mitochondrial dysfunction and suggest new potential therapeutic targets for patient treatment.