Given the vast number of chemicals that are released into the environment each year, it is imperative that we develop new predictive models to identify toxicants before unavoidable exposure harms the health of humans and other organisms. In vitro models are especially attractive in predictive toxicology as they can greatly reduce assay costs and animal usage while identifying those chemicals that may require further in vivo evaluation. With the derivation of both mouse and human embryonic stem cells, new opportunities have developed that could revolutionize the field of predictive toxicology. Stem cells themselves can be used to model earliest stages of development, or they can be differentiated to study later aspects of development and thereby model post-implantation. Because embryos and fetuses are usually more sensitive to environmental toxicants than adults, stem cells provide an unique tool for studying the prenatal phase in our life cycle. The embryonic stem cell test (EST), which has been validated for use with mouse ESC (mESC), is an accurate predictor of embryotoxic compounds, particularly those that are highly embryotoxic. Human embryonic stem cells (hESCs), although not yet incorporated into a validated test, are a particularly attractive platform for toxicological testing as they can give us direct information on humans and avoid concerns about species variation in response. This review discusses toxicological studies and strategies that have been used with embryonic stem cells during the past five years and possible directions that could lead to improvements in the development of predictive assays in the future.