Previous in vivo studies showed that systemic ethanol enhanced hippocampal neuronal responses to iontophoretically applied acetylcholine and somatostatin while having little or no effect on responses to other transmitters. We previously reported that these two agonists reciprocally regulate the non-inactivating, voltage-dependent K+ current called the M-current. Therefore, we tested ethanol superfusion on this current in rat hippocampal pyramidal neurons in vitro, using intracellular recording and single electrode voltage-clamp methods. Tetrodotoxin (TTX) was used to block Na+ spikes and synaptic transmitter release. Ethanol in low concentrations (22-44 mM), like muscarinic agonists, greatly reduced the M-current amplitude at depolarized membrane potentials and at 44 mM antagonized its augmentation by somatostatin. These changes were often accompanied by an inward baseline current with a conductance decrease. Other than a small inward current in some cells there was little or no consistent ethanol effect at resting membrane potentials. Atropine 1 microM (and TTX) did not alter the ethanol effect on the M-current. Therefore, the site of ethanol action is most likely distal to the muscarinic receptor. Ethanol reduction of the M-current, by summation of like effects, may account for the potentiation of acetylcholine responses seen in vivo and in vitro, and provides a mechanism for the excitatory effects of ethanol on some central neurons.