The neuropathology of the effects of ethanol on the developing central nervous system are similar to those of patients with mutations in L1, a neural cell adhesion molecule. This observation suggests that inhibition of L1 plays a role in the pathogenesis of alcohol-related neurodevelopmental disorders. Here we examine the effects of ethanol on L1 homophilic binding and on L1-mediated neurite outgrowth. Ethanol had no effect on cell adhesion or aggregation in a myeloma cell line expressing full-length human L1. In contrast, the rate of L1-mediated neurite outgrowth of rat postnatal day 6 cerebellar granule cells grown on a substratum of NgCAM, the chick homologue of L1, was inhibited by 48.6% in the presence of ethanol with a half-maximal concentration of 4.7 mM. The same effect was found with soluble L1-Fc, thus showing that the inhibitory effect is not dependent on cell adhesion. In contrast, neither laminin nor N-cadherin-mediated neurite outgrowth was inhibited by physiologic concentrations of ethanol. We conclude that one mechanism of ethanol's toxicity to the developing central nervous system may be the inhibition of L1-mediated neurite outgrowth.