Etoposide, a topoisomerase 2 (TOP2) inhibitor, is associated with the development of KMT2A (MLL)-rearranged infant leukemia. An epidemiological study suggested that in utero exposure to TOP2 inhibitors may be involved in generation of KMT2A (MLL) rearrangement. The present study examined the mechanism underlying the development of KMT2A (MLL)-rearranged infant leukemia in response to in utero exposure to etoposide in a mouse model. Fetal liver hematopoietic stem cells were more susceptible to etoposide than maternal bone marrow mononuclear cells. Etoposide-induced Kmt2a breakage was detected in fetal liver hematopoietic stem cells using a newly developed chromatin immunoprecipitation (ChIP) assay. Assessment of etoposide-induced chromosomal translocation by next-generation RNA sequencing (RNA-seq) identified several chimeric fusion messenger RNAs that were generated by etoposide treatment. However, Kmt2a (Mll)-rearranged fusion mRNA was detected in Atm-knockout mice, which are defective in the DNA damage response, but not in wild-type mice. The present findings suggest that in utero exposure to TOP2 inhibitors induces Kmt2a rearrangement when the DNA damage response is defective.