Exposure to the environmental pollutant 2,3,7,8-tetrachlorodibenzo-p-dioxin (TCDD) induces Cyp1a1, one of the major genes that play a key role in dioxin effects. A previous study showed that in utero TCDD exposure at embryonic day 12.5 dramatically increased Cyp1a1 induction during early development and caused DNA hypomethylation by postnatal day 14 at a specific CpG site, -500 from the Cyp1a1 transcription start site. Although this study showed epigenetic changes in the offspring from maternal TCDD exposure, exact effects in the earliest developmental stage are not known. Using mouse embryonic (ES) cells derived from B6N22^UTR mouse, this study explored the in vitro genetic and epigenetic effects from TCDD exposure. First, ES cells were differentiated into neuronal lineages for 11 days. As differentiation progressed, cells became neuronal-like expressing Map2. Although Cyp1a1 transcription was induced by TCDD exposure, the induction decreased as differentiation progressed. In the second experiment, hepatic cell differentiation method was used as a better candidate to examine Cyp1a1 transcriptional activity. ES cells stably transfected with EGFP driven by Cyp1a1 promoter were cultured into hepatocytes and were observed for 30 days. Fluorescent microscopy determined that some of EGFP-positive cells were clearly induced in TCDD treated cells. However, there was no change in DNA methylation. From these results, it can be concluded that in vitro, TCDD alters DNA methylation differently from in vivo models. Nevertheless, finding the epigenetic similarities between in vitro and in vivo toxic effects will open the door to mechanisms underlying epigenetic alterations arising from toxicological exposures during early development.