Following neurotoxic damage, cells repair their DNA, and survive or undergo apoptosis. This study tests the hypothesis that ethanol induces a DNA damage response (DDR) in neural stem cells (NSCs) that promotes excision repair (ER) and this repair is influenced by the growth factor environment. Non-immortalized NSCs treated with fibroblast growth factor 2 or transforming growth factor (TGF) β1 were exposed to ethanol. Ethanol increased total DNA damage, reactive oxygen species, and oxidized DNA bases. TGFβ1 potentiated these toxic effects. Transcriptional analyses of cultured NSCs revealed ethanol-induced increases in transcripts related to the DDR (e.g., Hus1 and p53), base ER (e.g., Mutyh and Nthl1), and nucleotide ER (e.g., Xpc), particularly in the presence of TGFβ1. Expression and activity of ER proteins were affected by ethanol. Similar changes occurred in proliferating cells of ethanol-treated mouse fetuses. Ethanol-induced DNA repair in NSCs depends on the ambient growth factors. Gene products for DNA repair in stem cells are among the first biomarkers identifying fetal alcohol-induced damage.