The effect of ethanol on muscarine-stimulated release of l-[3H]norepinephrine ([3H]NE) was studied using the rat pheochromocytoma cell line, PC12. At concentrations of 25 mM and above, ethanol produced a dose-dependent inhibition of muscarine-stimulated release of [3H]NE. The inhibition of muscarine-stimulated transmitter release occurred in the absence of any detectable effect of ethanol on [3H]NE uptake or on muscarinic binding to the cells. However, ethanol produced an inhibition of muscarine-stimulated elevation of intracellular free Ca++ which corresponded with the inhibition of transmitter release. At concentrations greater than 100 mM, ethanol produced an increase in the basal release of [3H]NE. Intracellular free Ca++ also was increased by ethanol concentrations greater than 100 mM. The elevation of basal transmitter release and intracellular free Ca++ by concentrations of ethanol greater than 100 mM occurred independently of the inhibition by ethanol of muscarine-stimulated elevation of intracellular free Ca++ and transmitter secretion. These results suggest that the effects of ethanol on neurotransmitter release are associated with the effects of ethanol on intracellular free Ca++.