Heterozygous loss-of-function mutations in SHANK2 are associated with autism spectrum disorder (ASD). We generated cortical neurons from induced pluripotent stem cells derived from neurotypic and ASD-affected donors. We developed sparse coculture for connectivity assays where SHANK2 and control neurons were differentially labeled and sparsely seeded together on a lawn of unlabeled control neurons. We observed increases in dendrite length, dendrite complexity, synapse number, and frequency of spontaneous excitatory postsynaptic currents. These findings were phenocopied in gene-edited homozygous SHANK2 knockout cells and rescued by gene correction of an ASD SHANK2 mutation. Dendrite length increases were exacerbated by IGF1, TG003, or BDNF, and suppressed by DHPG treatment. The transcriptome in isogenic SHANK2 neurons was perturbed in synapse, plasticity, and neuronal morphogenesis gene sets and ASD gene modules, and activity-dependent dendrite extension was impaired. Our findings provide evidence for hyperconnectivity and altered transcriptome in SHANK2 neurons derived from ASD subjects.