Krabbe Disease (KD) is a lysosomal leukodystrophy characterized by the production of psychosine in oligodendrocytes, leading to neurodegeneration and ultimately death. The only treatment modality currently available for this disease is hematopoietic stem cell transplantation (HSCT), a procedure with high morbidity, highlighting the need for further therapies to be developed. In this study, we established and characterized GALC knockout MO3.13 cells, a cell line derived from human oligodendrocytes, as a model for KD. Clonal MO3.13 cells with GALC KO were obtained via CRISPR/Cas9-mediated gene editing. GALC activity was measured by a 4-methylumbellyferyl (4-MU)-based assay, and morphology analyses were performed using light microscopy and transmission electron microscopy. Psychosine was measured by liquid chromatography-tandem mass spectrometry (LC-MS/MS). The GALC KO cells have elevated levels of psychosine and an increased number of autophagosomes, autolysosomes, and cytoplasmic granules on transmission electron microscopy. Glycogen abundance was decreased in GALC KO cells compared to controls. After administration of BMN-S202, a ceramide galactosyltransferase inhibitor, psychosine levels in GALC KO cells were reduced back to WT levels. In conclusion, we demonstrated that the GALC KO MO3.13 cell line recapitulates the KD phenotype and biochemical response to SRT and may be a useful KD model for mechanistic studies and therapeutic development for KD.