Ataxia-telangiectasia mutated (ATM) is known to play a central role in effecting the DNA damage response that protects somatic cells from potentially harmful mutations, and in this role it is a key anti-cancer agent. However, it also promotes repair of therapeutic damage (e.g. radiotherapy) and so frustrates the efficacy of some treatments. A better understanding of the mechanisms of ATM regulation is therefore important both in prevention and treatment of disease. While progress has been made in elucidating the key signal transduction pathways that mediate damage response in somatic cells, relatively little is known about whether these function similarly in pluripotent embryonic stem (ES) cells where ATM is also implicated in our understanding of adult stem cell ageing and in improvements in regenerative medicine. There is some evidence that different mechanisms may operate in ES cells and that our understanding of the mechanisms of ATM regulation is therefore incomplete. We investigated the behaviour of the damage response signalling pathway in mouse ES cells. We subjected the cells to the DNA-damaging agent doxorubicin, a drug that induces double-strand breaks, and measured ATM expression levels. We found that basal ATM gene expression was unaffected by doxorubicin treatment. However, following ATM kinase inhibition using a specific ATM inhibitor, we observed a significant increase in ATM and ataxia-telangiectasia and Rad3 related transcription. We demonstrate the use of a dynamical modelling approach to show that these results cannot be explained in terms of known mechanisms. Furthermore, we show that the modelling approach can be used to identify a novel feedback process that may underlie the anomalies in the data. The predictions of the model are consistent both with our in vitro experiments and with in vivo studies of ATM expression in somatic cells in mice, and we hypothesize that this feedback operates in both somatic and ES cells in vivo. The results point to a possible new target for ATM inhibition that overcomes the restorative potential of the proposed feedback.