Advances in our knowledge of the microsomal metabolism of ethanol enable us to understand a number of complications that develop in the alcoholic. After chronic ethanol consumption, microsomal ethanol-oxidizing system (MEOS) activity increases with an associated rise in microsomal cytochrome P-450, including a form different from that induced by phenobarbital and methylcholanthrene and which has a high affinity for ethanol, as shown in reconstituted systems. The role of this MEOS in vivo and its increase after chronic ethanol consumption was most conclusively shown in alcohol dehydrogenase-negative deer mice. Microsomal induction is also associated with enhanced metabolism of other drugs, resulting in metabolic drug tolerance. Furthermore, there is increased conversion to toxic metabolites of known hepatotoxic agents (such as CCl4), which may explain the enhanced susceptibility of alcoholics to the toxicity of industrial solvents. Furthermore, the ethanol-induced form of cytochrome P-450 has a high capacity for the conversion to toxic metabolites of some commonly used drugs, such as acetaminophen, and also carcinogens, such as dimethylnitrosamine which is activated at concentrations much lower than those required for other microsomal inducers. Moreover, catabolism of retinol is accelerated through a newly discovered microsomal pathway, thereby contributing to hepatic vitamin A depletion and possibly vitamin A toxicity. There is also induction of microsomal enzymes involved in lipoprotein production, resulting in hyperlipemia. Contrasting with the chronic effects of ethanol consumption, acutely, ethanol inhibits the metabolism of other drugs through competition for an at least partially shared microsomal detoxification pathway.