Fetal alcohol syndrome (FAS) is caused by maternal alcohol consumption during pregnancy. The reason why specific embryonic tissues are sensitive toward ethanol is not understood. We found that in neural crest-derived cell (NCC) cultures from the first branchial arch of E10 mouse embryos, incubation with ethanol increases the number of apoptotic cells by fivefold. Apoptotic cells stain intensely for ceramide, suggesting that ceramide-induced apoptosis mediates ethanol damage to NCCs. Apoptosis is reduced by incubation with CDP-choline (citicoline), a precursor for the conversion of ceramide to sphingomyelin. Consistent with NCC cultures, ethanol intubation of pregnant mice results in ceramide elevation and increased apoptosis of NCCs in vivo. Ethanol also increases the protein level of prostate apoptosis response 4 (PAR-4), a sensitizer to ceramide-induced apoptosis. Prenatal ethanol exposure is concurrent with malformation of parietal bones in 20% of embryos at day E18. Meninges, a tissue complex derived from NCCs, is disrupted and generates reduced levels of TGF-β1, a growth factor critical for bone and brain development. Ethanol-induced apoptosis of NCCs leading to defects in the meninges may explain the simultaneous presence of cranial bone malformation and cognitive retardation in FAS. In addition, our data suggest that treatment with CDP-choline may alleviate the tissue damage caused by alcohol.