Information on design principles governing transcriptome changes upon transition from safe to hazardous drug concentrations or from tolerated to cytotoxic drug levels are important for the application of toxicogenomics data in developmental toxicology. Here, we tested the effect of eight concentrations of valproic acid (VPA; 25-1000 μM) in an assay that recapitulates the development of human embryonic stem cells to neuroectoderm. Cells were exposed to the drug during the entire differentiation process, and the number of differentially regulated genes increased continuously over the concentration range from zero to about 3000. We identified overrepresented transcription factor binding sites (TFBS) as well as superordinate cell biological processes, and we developed a gene ontology (GO) activation profiler, as well as a two-dimensional teratogenicity index. Analysis of the transcriptome data set by the above biostatistical and systems biology approaches yielded the following insights: (i) tolerated (≤25 μM), deregulated/teratogenic (150-550 μM), and cytotoxic (≥800 μM) concentrations could be differentiated. (ii) Biological signatures related to the mode of action of VPA, such as protein acetylation, developmental changes, and cell migration, emerged from the teratogenic concentrations range. (iii) Cytotoxicity was not accompanied by signatures of newly emerging canonical cell death/stress indicators, but by catabolism and decreased expression of cell cycle associated genes. (iv) Most, but not all of the GO groups and TFBS seen at the highest concentrations were already overrepresented at 350-450 μM. (v) The teratogenicity index reflected this behavior, and thus differed strongly from cytotoxicity. Our findings suggest the use of the highest noncytotoxic drug concentration for gene array toxicogenomics studies, as higher concentrations possibly yield wrong information on the mode of action, and lower drug levels result in decreased gene expression changes and thus a reduced power of the study.