There are multiple mechanisms by which alcohol can damage the developing brain, but the type of damage induced will depend on the amount and developmental timing of exposure, along with other maternal and genetic factors. This article reviews current perspectives on how ethanol can produce neuroteratogenic effects by its interactions with molecular regulators of brain development. The current evidence suggests that alcohol produces many of its damaging effects by exerting specific actions on molecules that regulate key developmental processes (e.g., L1 cell adhesion molecule, alcohol dehydrogenase, catalase), interfering with the early development of midline serotonergic neurons and disrupting their regulatory-signaling function for other target brain structures, interfering with trophic factors that regulate neurogenesis and cell survival, or inducing excessive cell death via oxidative stress or activation of caspase-3 proteases. The current understanding of pathogenesis mechanisms suggests several strategic approaches to develop rational molecular prevention. However, the development of behavioral and biologic treatments for alcohol-affected children is crucial because it is unlikely that effective delivery of preventative interventions can realistically be achieved in ways to prevent prenatal damage in at-risk pregnancies. Toward that end, behavioral training that promotes experience-dependent neuroplasticity has been effective in a rat model of cerebellar damage induced by alcohol exposure during the period of brain development that is comparable to that of the human third trimester.