Many studies have demonstrated that the ability of alcohols and other intoxicant-anesthetics to affect biochemical, physiological, and behavioral processes rests in their hydrophobicity. This means that potency is determined by the ability of the drug to move from a water phase into a lipid or membrane phase. In more precise terms, anesthetic effects are correlated with the volume occupied by the anesthetic molecules within the membrane. Although the anesthetic effects, particularly the inhibition of nerve condition, have been used most frequently in establishing this correlation, the intoxicating effects (i.e., ataxia) of a series of alcohols had also been correlated with their membrane partitioning. These results suggest that the intoxicating, as well as anesthetic, effects of ethanol and related drugs are due to their penetrating into hydrophobic regions of nerve membranes. The predominant hydrophobic region of biological membranes is the "sea" of lipid that surrounds "islands" of functional proteins. This leads to the postulate that intoxicant-anesthetics alter the physical properties of membrane lipids and thus affect neuronal function. To evaluate this hypothesis, we must consider the lipid composition of brain membranes, the importance of membrane lipids in neuronal function, the techniques available for the study of membrane physical properties, and the effects of ethanol on nerve membranes.