As the interface between the blood and cerebrospinal fluid, the choroid plexus (ChP) mediates body-brain homeostasis and has broad potential for CNS regenerative medicine. Despite this, little is known about the human ChP or its epithelial cells (CPECs), which have been considered a uniform cell type. Based on an earlier proof-of-concept method, we devised a simple, efficient, and scalable protocol for CPEC differentiation from human pluripotent stem cells. Our 2D culture method shows success across multiple cell lines including iPSCs. The derived CPECs (dCPECs) developed canonical CPEC properties and functions in the absence of mesenchymal elements. The derived cells were them applied to wo branches of studies: modeling physiological development and heterogeneity of human CPECs and non-physiological diseases that have developmental origins. Developmental studies through single dCPEC transcriptomes across time, which increasingly correlated well with fetal CPEC transcriptomes, revealed a direct dCPEC origin from neuroepithelial cells that also produced neurons and neural progenitors. Transcriptomic analysis also identified dCPEC diversifications at early and later stages into subtypes enriched for anabolic-secretory (type1a), catabolic-absorptive (type1b), and ciliogenesis pathways (type2). Additionally, the subtypes were present at different stages of development, with the type 1 and 2 CPECs present until mid-gestation where only type 1 CPECs continue until late gestation where this population branches into type 1a and 1b CPECs. Our time course study has revealed novel roles of human CPECs and positioned them in a dynamic role in shaping the environment of the developing human brain. Disease modeling applications using patient derived iPSCs, have highlighted the possible relationship between CPECs and different neurological conditions. Diseases that have a developmental origin, such as mitochondria defect diseases and Alzheimer’s disease, have been modeled in our 2D cultures and show a negative effect on CPEC functions, and in the case of modeling Alzheimer’s disease, a differential effect on one CPEC subtype. These findings establish a robust human CPEC model system for basic studies and regenerative medicine applications while revealing CPEC subtype diversifications during prenatal human development and subtype specific effects in neurodegenerative diseases.