Retinal ganglion cells (RGCs) are essential for vision perception. In glaucoma and other optic neuropathies, RGCs and their optic axons undergo degenerative change and cell death; this can result in irreversible vision loss. Here we developed a rapid protocol for directly inducing RGC differentiation from human induced pluripotent stem cells (hiPSCs) by the overexpression of ATOH7, BRN3B, and SOX4. The hiPSC-derived RGC-like cells (iRGCs) show robust expression of various RGC-specific markers by whole transcriptome profiling. A functional assessment was also carried out and this demonstrated that these iRGCs display stimulus-induced neuronal activity, as well as spontaneous neuronal activity. Ethambutol (EMB), an effective first-line anti-tuberculosis agent, is known to cause serious visual impairment and irreversible vision loss due to the RGC degeneration in a significant number of treated patients. Using our iRGCs, EMB was found to induce significant dose-dependent and time-dependent increases in cell death and neurite degeneration. Western blot analysis revealed that the expression levels of p62 and LC3-II were upregulated, and further investigations revealed that EMB caused a blockade of lysosome–autophagosome fusion; this indicates that impairment of autophagic flux is one of the adverse effects of that EMB has on iRGCs. In addition, EMB was found to elevate intracellular reactive oxygen species (ROS) levels increasing apoptotic cell death. This could be partially rescued by the co-treatment with the ROS scavenger NAC. Taken together, our findings suggest that this iRGC model, which achieves both high yield and high purity, is suitable for investigating optic neuropathies, as well as being useful when searching for potential drugs for therapeutic treatment and/or disease prevention.