Fetal Alcohol Spectrum Disorders (FASD) describe ethanol-induced developmental defects including craniofacial malformations. While ethanol-sensitive genetic mutations contribute to facial malformations, the impacted cellular mechanisms remain unknown. Bmp signaling is a key regulator of epithelial morphogenesis driving facial development, providing a possible ethanol-sensitive mechanism. We found that zebrafish mutants for Bmp signaling components are ethanol-sensitive and affect anterior pharyngeal endoderm shape and gene expression, indicating ethanol-induced malformations of the anterior pharyngeal endoderm cause facial malformations. Integrating FASD patient data, we provide the first evidence that variants in the human Bmp receptor gene BMPR1B associate with ethanol-related differences in jaw volume. Our results show that ethanol exposure disrupts proper morphogenesis of, and tissue interactions between, facial epithelia that mirror overall viscerocranial shape changes and are predictive for Bmp-ethanol associations in human jaw development. Our data provide a mechanistic paradigm linking ethanol to disrupted epithelial cell behaviors that underlie facial defects in FASD.