Ethephon, a member of the organophosphorus compounds, is one of the most widely used plant growth regulators for artificial ripening. Although million pounds of this chemical is being used annually, the knowledge regarding its molecular toxicity is yet not sufficient. The purpose of this study was to evaluate the potential developmental toxicity of ethephon using embryonic stem cell model. The mouse embryonic stem cells (mESCs) were exposed to various concentrations of ethephon and the viability, cell cycle alteration and changes in the gene expression profile were evaluated using high-throughput RNA sequencing. Further, the effect of ethephon on neural differentiation potential was examined. The results showed that ethephon at noncytotoxic doses induced cell cycle arrest in mESCs. Gene ontology enrichment analysis showed that terms related to cell fate and organismal development, including neuron fate commitment, embryo development and cardiac cell differentiation, were markedly enriched in ethephon-treated cells. Neural induction of mESCs in the presence of ethephon was inhibited and the expression of neural genes was decreased in differentiated cells. Results obtained from this work clearly demonstrate that ethephon affects the gene expression profile of undifferentiated mESCs and prevents neural differentiation. Therefore, more caution against the frequent application of ethephon is advised.