Autophagy plays essential roles in cell survival. However, the functions and regulation of the autophagy-related proteins Atg5, LC3B, and Beclin 1 during anesthetic-induced developmental neurotoxicity remain unclear. This study aimed to understand the autophagy pathways and mechanisms that affect neurotoxicity, induced by the anesthetic emulsified isoflurane, in rat fetal neural stem cells. Fetal neural stem cells were cultured, in vitro, and neurotoxicity was induced by emulsified isoflurane treatment. The effects of pretreatment with the autophagy inhibitors 3-methyladenine and bafilomycin and the effects of transfection with small interfering RNA against ATG5 (siRNA-Atg5) were observed. Cell viability was determined using the 3-(4,5-dimethylthiazol-2-yl)-2,5-diphenyltetrazolium bromide assay, and apoptosis was assessed using flow cytometry. Ultrastructural changes were analyzed through transmission electron microscopy. The levels of the autophagy-related proteins LC3B, Beclin 1, Atg5, and P62 and the pro-apoptosis-related protein caspase-3 were analyzed using western blot assay. The inhibition of cell proliferation and that of apoptosis rate increased after treatment with emulsified isoflurane. Autophagolysosomes, monolayer membrane formation due to lysosomal degradation, were observed. The autophagy-related proteins LC3B, Beclin 1, Atg5, and P62 and caspase-3 were upregulated. These results confirm that emulsified isoflurane can induce toxicity and autophagy in fetal neural stem cells. Pre-treatment with 3-methyladenine and bafilomycin increased the apoptosis rate in emulsified isoflurane-treated fetal neural stem cells, which indicated that the complete inhibition of autophagy does not alleviate emulsified isoflurane-induced fetal neural stem cell toxicity. Atg5 expression was decreased significantly by siRNA-Atg5 transfection, and cell proliferation was inhibited. These results verify that the Atg5 autophagy pathway can be regulated to maintain appropriate levels of autophagy, which can inhibit the neurotoxicity induced by emulsified isoflurane anesthetic in fetal neural stem cells.