As a nutritional factor, folic acid can prevent cardiac and neural defects during embryo development. Our previous study showed that arsenic impairs embryo development by down-regulating Dvr1/GDF1 expression in zebrafish. Here, we investigated whether folic acid could protect against arsenic-mediated embryo toxicity. We found that folic acid supplementation increases hatching and survival rates, decreases malformation rate and ameliorates abnormal cardiac and neural development of zebrafish embryos exposed to arsenite. Both real-time PCR analysis and whole in-mount hybridization showed that folic acid significantly rescued the decrease in Dvr1 expression caused by arsenite. Subsequently, our data demonstrated that arsenite significantly decreased cell viability and GDF1 mRNA and protein levels in HEK293ET cells, while folic acid reversed these effects. Folic acid attenuated the increase in subcellular reactive oxygen species (ROS) levels and oxidative adaptor p66Shc protein expression in parallel with the changes in GDF1 expression and cell viability. P66Shc knockdown significantly inhibited the production of ROS and the down-regulation of GDF1 induced by arsenite. Our data demonstrated that folic acid supplementation protected against arsenic-mediated embryo toxicity by up-regulating the expression of Dvr1/GDF1, and folic acid enhanced the expression of GDF1 by decreasing p66Shc expression and subcellular ROS levels.