This study examined the effects of ethanol (EtOH) on mouse preimplantation development using an in vitro culture method. Embryos at the 1-cell, 2-cell, or 4-cell stage were exposed for 24 h to medium containing EtOH, then further cultured without EtOH to determine their ability to form blastocysts and to eventually hatch from the zona pellucida. EtOH exposure either arrested or enhanced normal development, depending on dose and embryonic stage of exposure. Exposure of 1-cell and 2-cell embryos to 1.6% (w/v) EtOH decreased blastocyst formation and hatching, and exposure of 1-cell embryos to 0.4% EtOH inhibited their development. At 0.1%, EtOH had an opposite effect, causing an increase in the percent blastocyst formation of treated 1-cell and 2-cell embryos. Neither inhibition nor stimulation of blastocyst formation occurred in 4-cell embryos exposed to 0.1-1.6% EtOH. Using an in vitro outgrowth model of implantation, embryos that reached the blastocyst stage were further tested for their ability to produce differentiated trophoblast cells. Blastocysts previously exposed to 0.1% EtOH during the 1-cell stage appeared to form adhesive trophoblasts earlier than control embryos, indicating that EtOH exposure can induce precocious differentiation of the trophoblast cells. The EtOH treated blastocysts contained significantly more cells than control blastocysts. These results indicate that EtOH can alter preimplantation development by either inhibiting or accelerating cell growth and differentiation.