Prenatal ethanol exposure may cause neurological damage and subsequent mental retardation in humans, with learning deficits similar to those following damage to the prefrontal cortex. This study examined cognitive dysfunction and cortical damage after prenatal exposure to ethanol using a chronic administration model. Pregnant Sprague-Dawley rats received one of three diets during gestation: a liquid diet containing 35% ethanol-derived calories (ETOH), an isocaloric liquid diet (ISO), or standard chow (CHOW). Subjects were obtained from ETOH dams with blood alcohol concentrations (BACs) above 90 mg/dl and corresponding ISO and CHOW controls (one male pup/litter; n=6 pups/group). At approximately 90 days of age, subjects began training on a series of unique auditory discrimination problems using a successive go/no-go procedure. A criterion of 85% accuracy determined when a rat continued to the next problem. Subjects completed a varying number of problems within a 30-session limit, after which all rats were tested on a tone/click discrimination and reversal. Subjects were then sacrificed and neuronal number in the medial prefrontal cortex (mPFC) was estimated by the optical fractionator method. Prenatal ethanol exposure induced significant cell loss in the mPFC, which was associated with significantly impaired reversal learning. Poor performance by ETOH subjects on the tone/click reversal indicates a transfer of training deficit that may reflect failures of inhibitory control.