The transcription factors Sox2, Oct4, and Nanog regulate within a narrow dose-range embryonic stem (ES) cell pluripotency and cell lineage commitment. Excess of Oct4 relative to Sox2 guides cells to mesoendoderm (ME), while abundance of Sox2 promotes neuroectoderm (NE) formation. Literature does not address whether ethanol interferes with these regulatory interactions during neural development. We hypothesized that ethanol exposure of ES cells in early differentiation causes an imbalance of Oct4 and Sox2 that diverts cells away from NE to ME lineage, consistent with the teratogenesis effects caused by prenatal alcohol exposure. Mouse ES cells were exposed to ethanol (0, 25, 50, and 100 mM) during retinoic acid (10 nM)-directed differentiation to NE for 0-6 days, and the expression of Sox2, Oct4, and Nanog was measured in single live cells by multiparametric flow cytometry, and the cellular phenotype was characterized by immunocytochemistry. Our data showed an ethanol dose-and time-dependent asymmetric modulation of Oct4 and Sox2 expression, as early as after 2 days of exposure. Single-cell analysis of the correlated expression of Sox2, Oct4, and Nanog revealed that ethanol promoted distinct subpopulations with a high Oct4/Sox2 ratio. Ethanol-exposed cells differentiated to fewer b-III tubulin-immunoreactive cells with an immature neuronal phenotype by 4 days. We interpret these data as suggesting that ethanol diverted cells in early differentiation from the NE fate toward the ME lineage. Our results provide a novel insight into the mode of ethanol action and opportunities for discovery of prenatal biomarkers at early stages.