Ethanol is a widely used drug whose mechanism of action, despite intensive study, remains uncertain. Biochemical and electrophysiological experiments have identified receptors and ion channels whose functions are altered at physiological concentrations of ethanol. Yet, the contribution of these potential targets to its intoxicating or behavioral effects is unclear. Unbiased forward genetic screens for resistant or hypersensitive mutants represent an attractive means of identifying the relevant molecular targets or biochemical pathways mediating the behavioral effects of neuroactive compounds. C. elegans has proven to be a particularly useful system for such studies. The behavioral effects of ethanol occur at equivalent tissue concentrations in mammals and in C. elegans, suggesting the existence of conserved drug targets in the nervous system. This chapter reviews the results of studies directed toward determining the mechanisms of action of ethanol. Studies of the neural adaptations that occur with prolonged drug exposure are also discussed. The methods used to characterize the actions of ethanol should be applicable to the characterizations of other compounds that affect the behavior of C. elegans.