Alcohol is thought to contribute to an increase in risk-taking behavior, but the neural correlates underlying this effect are not well understood. In this study, participants were given intravenous alcohol or placebo while undergoing functional magnetic resonance imaging (fMRI) and playing a risk-taking game. The game allowed us to examine the neural response to choosing a safe or risky option, anticipating outcome and receiving feedback. We found that alcohol increased risk-taking behavior, particularly among participants who experienced more stimulating effects of alcohol. fMRI scans demonstrated that alcohol increased activation in the striatum to risky compared with safe choices and dampened the neural response to notification of both winning and losing throughout the caudate, thalamus and insula. This study suggests that alcohol may increase risk-taking behavior by both activating brain regions involved in reward when a decision is made, and dampening the response to negative and positive feedback.