Fetal alcohol syndrome (FAS), presenting with a constellation of neuro-/psychological, craniofacial and cardiac abnormalities, occurs frequently in offspring of women who consume alcohol during pregnancy, with a prevalence of 1–3 per 1000 livebirths. The present study was designed to test the hypothesis that alcohol alters global DNA methylation, and modulates expression of the DNA methyltransferases (DNMTs) and various methyl CpG-binding proteins. Murine embryonic fibroblasts (MEFs), utilized as an in vitro embryonic model system, demonstrated ~5% reduction in global DNA methylation following exposure to 200 mM ethanol. In addition, ethanol induced degradation of DNA methyltransferases (DNMT-1, DNMT-3a, and DNMT-3b), as well as the methyl CpG-binding proteins (MeCP-2, MBD-2 and MBD-3), in MEF cells by the proteasomal pathway. Such degradation could be completely rescued by pretreatment of MEF cells with the proteasomal inhibitor, MG-132. These data support a potential epigenetic molecular mechanism underlying the pathogenesis of FAS during mammalian development.