Atypical teratoid rhabdoid tumors (ATRT) are challenging pediatric brain cancers which are predominantly associated with inactivation of the gene SMARCB1, a conserved subunit of the chromatin remodeling BAF complex, which has known contributions to developmental processes. To identify potential interactions between SMARCB1 loss and the process of neural development, we introduced an inducible SMARCB1 loss of function system into human induced pluripotent stem cells (iPSCs) which were subjected to either directed neuronal differentiation or differentiation into cerebral organoids. Using this system, we have identified substantial differences in the downstream effects of SMARCB1 loss depending on differentiation state and identified an interaction between SMARCB1 loss and neural differentiation pressure which causes a resistance to terminal differentiation and a defect in maintenance of a normal cell state. Our results provide insight into how SMARCB1 loss might interact with neural development in the process of ATRT tumorigenesis.