Ethanol is the main constituent of alcoholic beverages that exerts toxicity to neuronal development. Ethanol affects synaptogenesis and prevents proper brain development. In humans, synaptogenesis takes place during the third trimester of pregnancy, and in rodents this period corresponds to the initial few weeks of postnatal development. In this period neuronal maturation and differentiation begin and neuronal cells start migrating to their ultimate destinations. Although the neuronal development of all areas of the brain is affected, the cerebellum and cerebellar neurons are more susceptible to the damaging effects of ethanol. Ethanol's harmful effects include neuronal cell death, impaired differentiation, reduction of neuronal numbers, and weakening of neuronal plasticity. Neuronal development requires many hormones and growth factors such as retinoic acid, nerve growth factors, and cytokines. These factors regulate development and differentiation of neurons by acting through various receptors and their signaling pathways. Ethanol exposure during development impairs neuronal signaling mechanisms mediated by the N-methyl-d-aspartate (NMDA) receptors, the retinoic acid receptors, and by growth factors such as brain-derived neurotrophic factor (BDNF), insulin-like growth factor 1 (IGF-I), and basic fibroblast growth factor (bFGF). In combination, these ethanol effects disrupt cellular homeostasis, reduce the survival and migration of neurons, and lead to various developmental defects in the brain. Here we review the signaling mechanisms that are required for proper neuronal development, and how these processes are impaired by ethanol resulting in harmful consequences to brain development.