Ethanol is a ubiquitous environmental stressor that is toxic to all lifeforms. Here, we use the model eukaryote Saccharomyces cerevisiae to show that exposure to sublethal ethanol concentrations causes DNA replication stress and an increased mutation rate. Specifically, we find that ethanol slows down replication and affects localization of Mrc1, a conserved protein that helps stabilize the replisome. In addition, ethanol exposure also results in the recruitment of error-prone DNA polymerases to the replication fork. Interestingly, preventing this recruitment through mutagenesis of the PCNA/Pol30 polymerase clamp or deleting specific error-prone polymerases abolishes the mutagenic effect of ethanol. Taken together, this suggests that the mutagenic effect depends on a complex mechanism, where dysfunctional replication forks lead to recruitment of error-prone polymerases. Apart from providing a general mechanistic framework for the mutagenic effect of ethanol, our findings may also provide a route to better understand and prevent ethanol-associated carcinogenesis in higher eukaryotes.