Alcohol's deleterious effects on memory are well known. Acute alcohol-induced memory loss is thought to occur via inhibition of NMDA receptor (NMDAR)-dependent long-term potentiation in the hippocampus. We reported previously that ethanol inhibition of NMDAR function and long-term potentiation is correlated with a reduction in the phosphorylation of Tyr(1472) on the NR2B subunit and ethanol's inhibition of the NMDAR field excitatory postsynaptic potential was attenuated by a broad spectrum tyrosine phosphatase inhibitor. These data suggested that ethanol's inhibitory effect may involve protein tyrosine phosphatases. Here we demonstrate that the loss of striatal-enriched protein tyrosine phosphatase (STEP) renders NMDAR function, phosphorylation, and long-term potentiation, as well as fear conditioning, less sensitive to ethanol inhibition. Moreover, the ethanol inhibition was "rescued" when the active STEP protein was reintroduced into the cells. Taken together, our data suggest that STEP contributes to ethanol inhibition of NMDAR function via dephosphorylation of tyrosine sites on NR2B receptors and lend support to the hypothesis that STEP may be required for ethanol's amnesic effects.