Ethanol exposure during pregnancy is an established cause of birth defects, including neurodevelopmental defects. Most adult neurons are produced during the second trimester-equivalent period. The fetal neural stem cells (NSCs) that generate these neurons are an important but poorly understood target for teratogenesis. A cohort of miRNAs, including miR-153, may serve as mediators of teratogenesis. We previously showed that ethanol decreased, while nicotine increased miR-153 expression in NSCs. To understand the role of miR-153 in the etiology of teratology, we first screened fetal cortical NSCs cultured ex vivo, by microarray and quantitative RT-PCR analyses, to identify cell-signaling mRNAs and gene networks as important miR-153 targets. Moreover, miR-153 over-expression prevented neuronal differentiation without altering neuroepithelial cell survival or proliferation. Analysis of 3'UTRs and in utero over-expression of pre-miR-153 in fetal mouse brain identified Nfia (nuclear factor-1A) and its paralog, Nfib, as direct targets of miR-153. In utero ethanol exposure resulted in a predicted expansion of Nfia and Nfib expression in the fetal telencephalon. In turn, miR-153 over-expression prevented, and partly reversed, the effects of ethanol exposure on miR-153 target transcripts. Varenicline, a partial nicotinic acetylcholine receptor agonist that, like nicotine, induces miR-153 expression, also prevented and reversed the effects of ethanol exposure. These data collectively provide evidence for a role for miR-153 in preventing premature NSC differentiation. Moreover, they provide the first evidence in a preclinical model that direct or pharmacological manipulation of miRNAs have the potential to prevent or even reverse effects of a teratogen like ethanol on fetal development.