This work presents the teratogenic activity of the termite mound mushroom Termitomyces clypeatus extract on Danio rerio embryos. Hatched embryos treated with 0.1% and higher concentration of the mushroom extract significantly yielded higher mortality rate and delayed growth than the control embryos. The hatchability rate of embryos treated with 0.05% and higher concentrations of T. cleaptus extract was found to be significantly lower than that of the control. Apparently, the effect of extract to embryos is dose-dependent. The different phenotypic endpoints of embryos observed include wavy somite embryo, unhatched embryo with twisted tail tip, delayed development of embryo (still at segmentation phase), tail malformed embryo and coagulated embryo. Our results indicate that T. clypeatus contains biologically-active compounds that could induce teratogenicity in zebrafish embryos.