Alcohol insult triggers complex events in the liver, promoting fibrogenic/inflammatory signals and in more advanced cases, aberrant matrix deposition. It is well accepted that the regenerative capacity of the adult liver is impaired during alcohol injury. The liver progenitor/stem cells have been shown to play an important role in liver regeneration -in response to various chronic injuries; however, the effects of alcohol on stem cell differentiation in the liver are not well understood. We employed hepatic progenitor cells derived from hESCs to study the impact of ethanol on hepatocyte differentiation by exposure of these progenitor cells to ethanol during hepatocyte differentiation. We found that ethanol negatively regulated hepatic differentiation of hESC-derived hepatic progenitor cells in a dose-dependent manner. There was also a moderate cell cycle arrest at G1/S checkpoint in the ethanol treated cells, which is associated with a reduced level of cyclin D1 in these cells. Ethanol treatment specifically inhibited the activation of the ERK but not JNK nor the p38 MAP signaling pathway. At the same time, the WNT signaling pathway was also reduced in the cells exposed to ethanol. Upon evaluating the effects of the inhibitors of these two signaling pathways, we determined that the Erk inhibitor replicated the effects of ethanol on the hepatocyte differentiation and attenuated the WNT/β-catenin signaling, however, inhibitors of WNT only partially replicated the effects of ethanol on the hepatocyte differentiation. Our results demonstrated that ethanol negatively regulated hepatic differentiation of hESC-derived hepatic progenitors through inhibiting the MAPK/ERK signaling pathway, and subsequently attenuating the WNT signaling pathway. Thus, our finding provides a novel insight into the mechanism by which alcohol regulates cell fate selection of hESC-derived hepatic progenitor cells, and the identified pathways may provide therapeutic targets aimed at promoting liver repair and regeneration during alcoholic injury.