A sensitive immunocytochemical method for the localization of alcohol dehydrogenase (ADH) in the rat brain is described. The method employs rat liver ADH isolated and purified with Cap-Gapp affinity chromatography. Antiserum to rat liver ADH is generated in rabbits, and used in the peroxidase-antiperoxidase immunocytochemical method. The method is compatible with both light and electron microscopic methods of tissue preparation. In the present report we describe the identification of ADH in neurons of the mammillary bodies, periaqueductal gray, and the cerebral and cerebellar cortices of normal adult rats. In all brain tissues examined, the enzyme is limited to neuronal cytoplasm, and only to some neurons. The restriction of the enzyme to a limited percentage of neurons in the central nervous system may help to account for the difficulty in demonstrating the enzyme in whole brain homogenates, as the dilution of enzyme-bearing cytoplasm with a large volume of enzymatically inactive tissue would reduce the specific activity of the enzyme to near the limit of detectability. In the cerebellar cortex, the enzyme is found only in Purkinje cell cytoplasm. In the other regions examined, we are unable to identify by other criteria a specific neuronal class that consistently displays ADH reactivity. The reactive cells seem to be generally midrange in size and bipolar or multipolar in configuration. The presence of ADH in certain neurons leads us to speculate that intraneuronal ethanol metabolism may lead to focal accumulation of acetaldehyde. The intracellular presence of this toxin may in turn help to account for brain dysfunction in acute ethanol intoxication, and the neuropathology of chronic alcohol abuse.