Friedreich's ataxia (FRDA) is an autosomal-recessive neurodegenerative and cardiac disorder which occurs when transcription of the FXN gene is silenced due to an excessive expansion of GAA repeats into its first intron. Herein, we generate dorsal root ganglia organoids (DRG organoids) by in vitro differentiation of human iPSCs. Bulk and single-cell RNA sequencing show that DRG organoids present a transcriptional signature similar to native DRGs and display the main peripheral sensory neuronal and glial cell subtypes. Furthermore, when co-cultured with human intrafusal muscle fibers, DRG organoid sensory neurons contact their peripheral targets and reconstitute the muscle spindle proprioceptive receptors. FRDA DRG organoids model some molecular and cellular deficits of the disease that are rescued when the entire FXN intron 1 is removed, and not with the excision of the expanded GAA tract. These results strongly suggest that removal of the repressed chromatin flanking the GAA tract might contribute to rescue FXN total expression and fully revert the pathological hallmarks of FRDA DRG neurons.