We have previously reported that mouse embryonic stem cells (mESCs) do not have a functional IFN-based antiviral mechanism. The current study extends our investigation to the inflammatory response in mESCs and mESC-differentiated cells. We demonstrate that LPS, TNFα, and viral infection, all of which induce robust inflammatory responses in naturally differentiated cells, failed to activate NFκB, the key transcription factor that mediates inflammatory responses, and were unable to induce the expression of inflammatory genes in mESCs. Similar results were obtained in human ESCs (hESCs). In addition to the inactive state of NFκB, the deficiency of inflammatory response in mESCs is also attributed to the lack of functional receptors for LPS and TNFα. In vitro differentiation can trigger the development of the inflammatory response mechanism, as indicated by the transition of NFκB from its inactive to active state. However, a limited response was observed in mESC-differentiated fibroblasts only to TNFα and viral infection, but not to LPS. We conclude that the inflammatory response mechanism is not active in mESCs, and in vitro differentiation promotes only partial development of this mechanism. Together with our previous studies, the findings described in this paper demonstrate that ESCs are fundamentally different from differentiated somatic cells in their innate immunity, which may have important implications in developmental biology, immunology and ESC-based regenerative medicine.