There is a need to elucidate the impact of ethanol on the subsurface environment because of the application of ethanol as automotive fuel. This study quantifies the effects of changes in surface tension, viscosity, and density induced by ethanol on the transmission and retention of water in the vadose zone. The HYDRUS-1D model was modified to simulate two different scenarios of flow in a sandy loam involving ponding (constant head) or spillage with a subsequent rainfall event (constant flux). Solutions containing different amounts of the highly miscible ethanol (10, 50, and 100% by weight) as well as pristine water were considered. During ponding, ethanol reduced the amount of fluid entering the soil and slowed down the advancement of the wetting front. Viscosity effects were predominant for this scenario, reducing the average depth of the infiltrating liquid up to 44%. The total amount of pure ethanol that entered the soil was 11.38 vs. 17.64 cm for pure water. For the spillage scenario, the results suggest that density has little impact on the liquid movement. Surface tension effects are predominant in the upper portion of the soil. The changes in hydraulic conductivity due to ethanol-induced modifications of solution viscosity are responsible for the slower advancement of the moisture front. The 10% ethanol solution moved 43.1% faster than pure ethanol during the first 2 d because of viscosity and surface tension effects.