Alterations in nervous system functioning following acute and chronic ethanol exposure have been studied in a great number of experimental investigations. Results from many of these investigations can be difficult to interpret, particularly since a variety of techniques and exposure models are employed. This review emphasizes those studies which, in the opinion of the author, fit into a pattern where results from studying one function of the nervous system is in accordance with results from studying another. Thus, the fluidizing effect of ethanol on the neuronal membrane - an effect which ethanol shares with anaesthetics - leads to a change in protein function which in turn affects ion transport such as Na+ and Ca++ across the membrane due to changes in the ion channels. Cation influx is probably directly coupled to neurotransmitter release which is in agreement with the finding that ethanol exposure results in inhibition of Na+ and Ca++ current as well as acetylcholine release. The sensitization of the dopaminergic system after ethanol exposure may also be related to the changes in cation flux, and the changes in this system probably play a crucial rôle in the development of tolerance and withdrawal symptoms. Other aspects such as impairment of protein synthesis, altered GABA function of impairment of neuron excitability and conduction are more difficult to place in proper perspective. The rôle of acetaldehyde in acute as well as chronic ethanol intoxication also remains a controversy. These may, however, be secondary phenomena to primary changes in different part of the nervous system not necessarily important in the clinical situation. Behavioural and anatomical studies particularly from recent years have shown that experimental animals develop memory disturbances following chronic exposure even when kept on sufficient diet. These findings argue strongly for a direct toxic effect of ethanol, and are furthermore compatible with behavioural changes in chronic alcoholics, dominated by memory impairment. Since it has been argued that the cholinergic system plays a significant rôle for memory function, a possible explanation for some of the psychological and anatomical deficits caused by ethanol is thus the changes in the function of the cholinergic system particularly in the hippocampal regions.