Alcohol has a strong causal relationship with sexual arousal and disinhibited sexual behavior in humans; however, the physiological support for this notion is largely lacking and thus a suitable animal model to address this issue is instrumental. We investigated the effect of ethanol on sexual behavior in Drosophila. Wild-type males typically court females but not males; however, upon daily administration of ethanol, they exhibited active intermale courtship, which represents a novel type of behavioral disinhibition. The ethanol-treated males also developed behavioral sensitization, a form of plasticity associated with addiction, since their intermale courtship activity was progressively increased with additional ethanol experience. We identified three components crucial for the ethanol-induced courtship disinhibition: the transcription factor regulating male sex behavior Fruitless, the ABC guanine/tryptophan transporter White and the neuromodulator dopamine. fruitless mutant males normally display conspicuous intermale courtship; however, their courtship activity was not enhanced under ethanol. Likewise, white males showed negligible ethanol-induced intermale courtship, which was not only reinstated but also augmented by transgenic White expression. Moreover, inhibition of dopamine neurotransmission during ethanol exposure dramatically decreased ethanol-induced intermale courtship. Chronic ethanol exposure also affected a male's sexual behavior toward females: it enhanced sexual arousal but reduced sexual performance. These findings provide novel insights into the physiological effects of ethanol on sexual behavior and behavioral plasticity.