The cerebellum is an important target of ethanol toxicity given that cerebellar ataxia is the most consistent physical manifestation of acute ethanol consumption. Despite the significance of the cerebellum in ethanol-induced cerebellar ataxia (EICA), the cellular and molecular mechanisms underlying EICA are incompletely understood. However, two important findings have shed greater light on this phenomenon. First, ethanol-induced blockade of cerebellar adenosine uptake in rodent models points to a role for adenosinergic A1 modulation of EICA. Second, the consistent observation that intracerebellar administration of nicotine in mice leads to antagonism of EICA provides evidence for a critical role of cerebellar nitric oxide (NO) in EICA reversal. Based on these two important findings, this review discusses the potential molecular events at two key synaptic sites (mossy fiber-granule cell-Golgi cell (MGG synaptic site) and granule cell parallel fiber-Purkinje cell (GPP synaptic site) that lead to EICA. Specifically, ethanol-induced neuronal NOS inhibition at the MGG synaptic site acts as a critical trigger for Golgi cell activation which leads to granule cell deafferentation. Concurrently, ethanol-induced inhibition of adenosine uptake at the GPP synaptic site produces adenosine accumulation which decreases glutamate release and leads to the profound activation of Purkinje cells (PCs). These molecular events at the MGG and GPP synaptic sites are mutually reinforcing and lead to cerebellar dysfunction, decreased excitatory output of deep cerebellar nuclei, and EICA. The critical importance of PCs as the sole output of the cerebellar cortex suggests normalization of PC function could have important therapeutic implications.