Current globally harmonized Organisation for Economic Co-operation and Development (OECD) animal test guidelines for developmental toxicity require high numbers of experimental animals. To reduce animal use in this field, alternative developmental toxicity assays are highly desirable. We previously developed a dynamic in vitro model for screening effects of possible neurodevelopmental toxicants, using neural cell differentiation of pluripotent murine embryonic stem cells. To further mechanistically characterize the mouse neural embryonic stem cell test (ESTn) and to improve detection of possible neurodevelopmental toxicants, gene expression patterns were studied describing neural cell differentiation over time, as well as the impact on gene expression of exposure to the well-known neurotoxicant methylmercury (MeHg). A transcriptomics study was performed to examine whole-genome expression changes during the first 7 days of the cell differentiation protocol. Specific gene clusters were identified and enrichment analysis of Gene Ontology (GO) terms and gene sets derived from literature was performed using DAVID and T-profiler. Over time, a decrease of blastocyst and trophectoderm GO terms was observed, which included well-characterized pluripotency genes. Furthermore, an increase in the range of neural development-related GO terms, such as neuron differentiation and the wnt pathway, was observed. Analysis of gene expression using principle component analysis showed a time-dependent track in untreated cells, describing the process of neural differentiation. Furthermore, MeHg was shown to induce deviation from the predefined differentiation track. The compound inhibited general development GO terms and induced neural GO terms over time. This system appears promising for studying compound effects on neural differentiation in a mechanistic approach.