Gestational alcohol exposure causes a range of neuropsychological disorders by modulating neurodevelopmental genes and proteins. The extent of damage depends on the stage of the embryo as well as dosage, duration and frequency of exposure. Here, we investigated the neurotoxic effects of alcohol using human embryonic stem cells. Multiple read‐outs were engaged to assess the proliferation and differentiation capacity of neural precursor cells upon exposure to 100 mM ethanol for 48 h corresponding to the blood alcohol levels for binge drinkers. Whole‐genome analysis revealed a spatiotemporal dysregulation of neuronal‐ and glial‐specific gene expression that play critical roles in central nervous system (CNS) development. Alterations observed in the transcriptome may be attributed to epigenetic constitution witnessed by differential histone H3 Lys‐4/Lys‐27 modifications and acetylation status. In‐depth mRNA and protein expression studies revealed abrogated extracellular signal‐regulated kinases signaling in alcohol‐treated cells. Consistent with this finding, ingenuity pathway analysis and micro‐RNA profiling demonstrated up‐regulation of miR‐145 by targeting the neural specifier Sox‐2. We also show that the neurite branching complexity of tubulin, beta 3 class III+ neurons was greatly reduced in response to alcohol. Finally, in vivo studies using zebrafish embryos reconfirmed the in vitro findings. Employing molecular endpoints in a human model, this report indicates for the first time that acute alcohol exposure could lead to impaired brain development via perturbation of extracellular signal‐regulated kinases pathway and miR‐145. However, it still needs to be addressed whether these modulations sustain throughout development, compromising the ability of the individual during adulthood and aging.