Japanese medaka (Oryzias latipes) embryos were exposed to sediments spiked with environmental concentrations (300 and 3,000 ng/g dry weight) of pyrene (Pyr) and methylpyrene (MePyr) throughout their development. Embryotoxicity, teratogenicity, and transcriptional responses (qRT-PCR) were analyzed in embryos and newly hatched larvae. The genotoxicity of the two polycyclic aromatic hydrocarbons (PAHs) was also tested in prolarvae using the comet assay. Exposure to each compound had a clear impact on embryonic development and resulted in several teratogenic effects, including cardiovascular injuries, reduced absorption of yolk sac reserves, and jaw and spinal deformities. Interestingly, the overall toxic effects of Pyr and MePyr considerably overlapped those induced following dioxin exposure. qRT-PCR analysis revealed the transcriptional induction of genes involved in mitochondrial energetic metabolism (coxI), xenobiotic biotransformation (cyp1a), and cell cycle regulation (wnt1) by the two PAHs. MePyr also activated cell cycle arrest (p53), oxidative DNA damage repair (ogg1), and retinoid-mediated (raldh2 and rarα1) gene transcription. DNA damage was not found to be significantly increased following Pyr and MePyr exposure. The lack of significant genotoxic effect in comparison to the control might be the consequence of the efficient onset of DNA damage repair mechanisms as suggested by ogg1 gene transcription upregulation. Results reported in the present study have brought new insights into the modes of action of Pyr, and the effects of MePyr exposure have been investigated in fish ELS for the first time.