Studies of sister chromatid exchanges (SCE) and recombination rate of certain mini‐satellite DNAs have demonstrated that their levels are considerably higher during the preimplantation stage than in latest developmental stages of embryos. It appeared likely that single‐strand DNA breaks (SSB) may be relevant to both events during early development. With this in mind, we estimated SSB during in vitro retinoic acid (RA)‐induced and spontaneous differentiation of mouse teratocarcinoma (EC) and embryonic stem (ES) cells. Using the method of nucleoid sedimentation and single‐cell DNA electrophoresis, we have observed a dramatic increase in the SSB during the first 2–4 mitoses after beginning of differentiation of EC cells, followed by a gradual return to the basal level characteristic of undifferentiated cells. The increase in the SSB was manifested as the appearance of mass nucleoids with slow sedimentation rates, as well as the low‐weight mass fragments in DNA patterns of most cells. We concluded that not less then half of genomic DNA has been nicked at the early steps of differentiation. The decrease in SSB level was observed in spite of continuing differentiation, as judged by embryonic antigens and morphological criteria. Also, the increase in the SCE level coincided with that of SSB, possibly being its consequence. The scheduled “surge” of SSB may be the earliest event in commencing differentiation at steps without a phenotypic manifestation. Mol. Reprod. Dev. 47:1–10, 1997. © 1997 Wiley‐Liss, Inc.