The molecular mechanisms of ethanol toxicity and tolerance in bacteria, while important for biotechnology and bioenergy applications, remain incompletely understood. Genetic studies have identified potential cellular targets for ethanol and revealed multiple mechanisms of tolerance, but it remains difficult to separate direct and indirect effects of ethanol. We used adaptive evolution to generate spontaneous ethanol-tolerant strains of Escherichia coli, then characterized the mechanisms of toxicity and resistance associated with select mutations. Evolved alleles of metJ, rho, and rpsQ were sufficient to recapitulate much of the observed ethanol tolerance, implicating translation and transcription as key processes affected by ethanol. We found that ethanol induces mistranslation errors during protein synthesis, and that the evolved rpsQ allele protects cells by rendering the ribosome hyper-accurate. Ribosome profiling and RNAseq analyses of the ethanol-tolerant strain versus the wild type established that ethanol negatively affects transcriptional and translational processivity. Ethanol-stressed cells exhibited ribosomal stalling at internal AUG codons, which may be ameliorated by the adaptive inactivation of the MetJ repressor of methionine biosynthesis genes. Ethanol also caused aberrant intragenic transcription termination for mRNAs with low ribosome density, which was reduced in a strain with the adaptive rho mutation. Furthermore, ethanol inhibited transcript elongation by RNA polymerase in vitro. We propose that ethanol-induced inhibition and uncoupling of mRNA and protein synthesis are major contributors to ethanol toxicity in E. coli, and that adaptive mutations in metJ, rho, and rpsQ protect central dogma processes in the presence of ethanol. RNA-seq comparison of wild-type and mutant strains to assess readthrough of Rho-dependent transcriptional terminators