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1. The ability of 20 mono- and di-phenylhydantoin derivatives to inhibit differentiation of rat embryo mid-brain and limb bud cells in culture has been used as an index of the teratogenic hazard represented by these compounds. 2. Molecular orbital calculations on these compounds, using the MINDO-3 (modified intermediate neglect of differential overlap) and CNDO-2 (complete neglect of differential overlap) methods, were combined with indices of teratogenicity in the two cell types, to generate a coherent structure-toxicity relationship. 3. Teratogenicity correlated with frontier orbital electron density of the N1 hydantoin ring atom (HOMO-N1) in a sub-series of 12 monophenylhydantoins, whereas the corresponding toxicity for both mono- and di-phenylhydantoins related more to the molecular polarizability (alpha mol) of the molecule. 4. Furthermore the same structural parameter (alpha mol) exhibited a parallelism with log P values of these 20 compounds, indicating the importance of lipophilicity in the toxicity of these compounds. 5. Overall, the data emphasize the ability of electronic structural calculations to identify chemical descriptors of toxicity.