Embryonic development can be partially recapitulated in vitro by differentiating human embryonic stem cells (hESCs). Thalidomide is a developmental toxicant in vivo and acts in a species-dependent manner. Besides its therapeutic value, thalidomide also serves as a prototypical model to study teratogenecity. Although many in vivo and in vitro platforms have demonstrated its toxicity, only a few test systems accurately reflect human physiology. We used global gene expression and proteomics profiling (two dimensional electrophoresis (2DE) coupled with Tandem Mass spectrometry) to demonstrate hESC differentiation and thalidomide embryotoxicity/teratogenecity with clinically relevant dose(s). Proteome analysis showed loss of POU5F1 regulatory proteins PKM2 and RBM14 and an over expression of proteins involved in neuronal development (such as PAK2, PAFAH1B2 and PAFAH1B3) after 14 days of differentiation. The genomic and proteomic expression pattern demonstrated differential expression of limb, heart and embryonic development related transcription factors and biological processes. Moreover, this study uncovered novel possible mechanisms, such as the inhibition of RANBP1, that participate in the nucleocytoplasmic trafficking of proteins and inhibition of glutathione transferases (GSTA1, GSTA2), that protect the cell from secondary oxidative stress. As a proof of principle, we demonstrated that a combination of transcriptomics and proteomics, along with consistent differentiation of hESCs, enabled the detection of canonical and novel teratogenic intracellular mechanisms of thalidomide.