Our prior work showed that brief exposure of pregnant C3H mice to inorganic arsenic-induced hepatocellular carcinoma (HCC) formation in adult male offspring. The current study examined the early hepatic events associated with this oncogenic transformation. Pregnant mice were exposed to a known carcinogenic dose of arsenic (85 ppm) in the drinking water from gestation days 8 to 18. The dams were allowed to give birth and liver samples from newborn males were analyzed for arsenic content, global DNA methylation and aberrant expression of genes relevant to the carcinogenic process. Arsenic content in newborn liver reached 57 ng/g wet weight, indicating arsenic had crossed the placenta, reached the fetal liver and that significant amounts remained after birth. Global methylation status of hepatic DNA was not altered by arsenic in the newborn. However, a significant reduction in methylation occurred globally in GC-rich regions. Microarray and real-time RT-PCR analysis showed that arsenic exposure enhanced expression of genes encoding for glutathione production and caused aberrant expression of genes related to insulin growth factor signaling pathways and cytochrome P450 enzymes. Other expression alterations observed in the arsenic-treated male mouse newborn liver included the overexpression of cdk-inhibitors and stress response genes including increased expression of metallothionein-1 and decreased expression of betaine-homocysteine methyltransferase and thioether S-methyltransferase. Thus, transplacental exposure to arsenic at a hepatocarcinogenic dose induces alterations in DNA methylation and a complex set of aberrant gene expressions in the newborn liver, a target of arsenic carcinogenesis.