Scientists found that the cocktail of chemicals in cigarettes is particularly harmful to developing liver cells.
They developed a method of studying the effects of maternal smoking on liver tissue using embryonic stem cells.
The team, led by the University of Edinburgh, also discovered the cigarette chemicals affect male and female foetuses differently.
During their research they used pluripotent stem cells - cells which have the ability to transform into other cell types - to build foetal liver tissue.
Liver cells were exposed to the harmful chemicals found in cigarettes, including specific substances known to circulate in foetuses when mothers smoke.
The study showed that a chemical cocktail - similar to that found in cigarettes - harmed foetal liver health more than individual components.
Dr David Hay from the University of Edinburgh's centre for regenerative medicine, said: "Cigarette smoke is known to have damaging effects on the foetus, yet we lack appropriate tools to study this in a very detailed way.
"This new approach means that we now have sources of renewable tissue that will enable us to understand the cellular effect of cigarettes on the unborn foetus."
The liver is vital in clearing toxic substances and plays a major role in regulating metabolism.
Smoking cigarettes, which contain around 7,000 chemicals, can damage foetal organs and may do lasting harm.
The findings of the latest research, which was carried out in collaboration with the Universities of Aberdeen and Glasgow, also highlighted the different effects of cigarette smoke on livers in male and female foetuses.
Male tissue showed liver scarring and female tissue showed more damage to cell metabolism.
Prof Paul Fowler, director of the institute of medical sciences at the University of Aberdeen, said: "This work is part of an ongoing project to understand how cigarette smoking by pregnant mothers has harmful effects on the developing foetus.
"These findings shed light on fundamental differences in damage between male and female foetuses."
The study is published in the journal Archives of Toxicology.