Alcohol is among the most widely used psychoactive substances worldwide. Ethanol metabolites such as acetate, thought to be primarily the result of ethanol breakdown by hepatic aldehyde dehydrogenase 2 (ALDH2), contribute to alcohol's behavioural effects and alcoholism. Here, we show that ALDH2 is expressed in astrocytes in the mouse cerebellum and that ethanol metabolism by astrocytic ALDH2 mediates behavioural effects associated with ethanol intoxication. We show that ALDH2 is expressed in astrocytes in specific brain regions and that astrocytic, but not hepatocytic, ALDH2 is required to produce ethanol-derived acetate in the mouse cerebellum. Cerebellar astrocytic ALDH2 mediates low-dose ethanol-induced elevation of GABA levels, enhancement of tonic inhibition and impairment of balance and coordination skills. Thus, astrocytic ALDH2 controls the production, cellular and behavioural effects of alcohol metabolites in a brain-region-specific manner. Our data indicate that astrocytic ALDH2 is an important, but previously under-recognized, target in the brain to alter alcohol pharmacokinetics and potentially treat alcohol use disorder.