Ethanol is among the drugs with anesthetic potency determined by lipid solubility, in accord with the Meyer-Overton hypothesis. Thus, it is likely that ethanol acts in a hydrophobic environment. Using electron paramagnetic resonance with 5-doxylstearic acid as spin label, we find that ethanol disorders mouse cell membranes, making the lipid matrix more fluid. We surmise that consequent disruption of the function of integral membrane proteins may be the cause of ethanol's central actions. When mice are treated for 8 days with ethanol, their membranes become tolerant to the disordering effect of ethanol. This tolerance is accompanied by an increased proportion of cholesterol in the membranes.