Repeated alcohol consumption leads to the development of tolerance, simply defined as an acquired resistance to the physiological and behavioural effects of the drug. This tolerance allows increased alcohol consumption, which over time leads to physical dependence and possibly addiction. Previous studies have shown that Drosophila develop ethanol tolerance, with kinetics of acquisition and dissipation that mimic those seen in mammals. This tolerance requires the catecholamine octopamine, the functional analogue of mammalian noradrenaline. Here we describe a new gene, hangover, which is required for normal development of ethanol tolerance. hangover flies are also defective in responses to environmental stressors, such as heat and the free-radical-generating agent paraquat. Using genetic epistasis tests, we show that ethanol tolerance in Drosophila relies on two distinct molecular pathways: a cellular stress pathway defined by hangover, and a parallel pathway requiring octopamine. hangover encodes a large nuclear zinc-finger protein, suggesting a role in nucleic acid binding. There is growing recognition that stress, at both the cellular and systemic levels, contributes to drug- and addiction-related behaviours in mammals. Our studies suggest that this role may be conserved across evolution.