The brain is one of the major targets of chronic alcohol abuse. Yet the fundamental mechanisms underlying alcohol-mediated brain damage remain unclear. The products of alcohol metabolism cause DNA damage, which in conditions of DNA repair dysfunction leads to genomic instability and neural death. We propose that one-carbon metabolism (OCM) impairment associated with long term chronic ethanol intake is a key factor in ethanol-induced neurotoxicity, because OCM provides cells with DNA precursors for DNA repair and methyl groups for DNA methylation, both critical for genomic stability. Using histological (immunohistochemistry and stereological counting) and biochemical assays, we show that 3-week chronic exposure of adult mice to 5% ethanol (Lieber-Decarli diet) results in increased DNA damage, reduced DNA repair, and neuronal death in the brain. These were concomitant with compromised OCM, as evidenced by elevated homocysteine, a marker of OCM dysfunction. We conclude that OCM dysfunction plays a causal role in alcohol-induced genomic instability in the brain because OCM status determines the alcohol effect on DNA damage/repair and genomic stability. Short ethanol exposure, which did not disturb OCM, also did not affect the response to DNA damage, whereas additional OCM disturbance induced by deficiency in a key OCM enzyme, methylenetetrahydrofolate reductase (MTHFR) in Mthfr(+/-) mice, exaggerated the ethanol effect on DNA repair. Thus, the impact of long term ethanol exposure on DNA repair and genomic stability in the brain results from OCM dysfunction, and MTHFR mutations such as Mthfr 677C→T, common in human population, may exaggerate the adverse effects of ethanol on the brain.