Aims/hypothesis. Maternal diabetes increases oxidative stress in embryos. Maternal diabetes also inhibits expression of embryonic genes, most notably, Pax-3, which is required for neural tube closure. Here we tested the hypothesis that oxidative stress inhibits expression of Pax-3, thereby providing a molecular basis for neural tube defects induced by diabetic pregnancy. Methods. Maternal diabetes-induced oxidative stress was blocked with α-tocopherol (vitamin E), and oxidative stress was induced with the complex III electron transport inhibitor, antimycin A, using pregnant diabetic or non-diabetic mice, primary cultures of neurulating mouse embryo tissues, or differentiating P19 embryonal carcinoma cells. Pax-3 expression was assayed by quantitative RT-PCR, and neural tube defects were scored by visual inspection. Oxidation-induced DNA fragmentation in P19 cells was assayed by electrophoretic analysis. Results. Maternal diabetes inhibited Pax-3 expression and increased neural tube defects, and α-tocopherol blocked these effects. In addition, induction of oxidative stress with antimycin A inhibited Pax-3 expression and increased neural tube defects. In cultured embryo tissues, high glucose-inhibited Pax-3 expression, and this effect was blocked by α-tocopherol and GSH-ethyl ester, and Pax-3 expression was inhibited by culture with antimycin A. In differentiating P19 cells, antimycin A inhibited Pax-3 induction but did not induce DNA strand breaks. Conclusion/interpretation. Oxidative stress inhibits expression of Pax-3, a gene that is essential for neural tube closure. Impaired expression of essential developmental control genes could be the central mechanism by which neural tube defects occur during diabetic pregnancy, as well as other sources of oxidative stress.