In the present study, it was hypothesized that disruption of imprinting control in the H19/Igf2 domain may be a mechanism of ethanol-induced growth retardation—a key clinical feature of the fetal alcohol spectrum disorders (FASD). To test this prediction, genomic bisulphite sequencing was carried out on 473 bp of the H19 imprinting control region in DNA obtained from midgestation F(1) hybrid mouse embryos (C57BL/6 × Mus musculus castaneus) exposed to ethanol during preimplantation development. Although ethanol-exposed placentae and embryos were severely growth retarded in comparison with saline-treated controls, DNA methylation at paternal and maternal alleles was unaffected in embryos. However, paternal alleles were significantly less methylated in ethanol-treated placentae in comparison with saline-treated controls. Partial correlations suggested that the relationship between ethanol and placental weight partly depended on DNA methylation at a CCCTC-binding factor site on the paternal allele in placentae, suggesting a novel mechanism of ethanol-induced growth retardation. In contrast, partial correlations suggested that embryo growth retardation was independent of placental growth retardation. Relaxation of allele-specific DNA methylation in control placentae in comparison with control embryos was also observed, consistent with a model of imprinting in which 1) regulation of allele-specific DNA methylation in the placenta depends on a stochastic interplay between silencer and enhancer chromatin assembly factors and 2) imprinting control mechanisms in the embryo are more robust to environmental perturbations.