This review deals with the recent developments on the epigenetic effects of ethanol. A large body of data have come from studies in liver and in neuronal systems and involve post-translational modifications in histones and methylations in DNA. Ethanol causes site selective acetylation, methylation, and phosphorylation in histone. With respect to methylations the methyl group donating system involving S-adenosyl methionine appears to play a central role. There is contrasting effect of acetylation versus methylation on the same site of histone, as it relates to the transcriptional activation. Epigenetic memory also appears to correlate with liver pathology and Mallory body formation. Experimental evidence supports transcriptional regulation of genes in the CNS by DNA methylations. These studies are contributing towards a better understanding of a novel epigenetic regulation of gene expression in the context of alcohol. The critical steps and the enzymes (e.g., histone acetyltransferase, histone deacetylase, DNA methyltransferase) responsible for the epigenetic modifications are prime targets for intense investigation. The emerging data are also beginning to offer novel insight towards defining the molecular actions of ethanol and may contribute to potential therapeutic targets at the nucleosomal level. These epigenetic studies have opened up a new avenue of investigation in the alcohol field.