The magnitude of the detrimental effects following in utero alcohol exposure, including fetal alcohol syndrome and other fetal alcohol spectrum disorders (FASD), is globally underestimated. The effects include irreversible cognitive and behavioral disabilities as a result of abnormal brain development, pre- and postnatal growth retardation and facial dysmorphism. Parental alcohol exposure and its effect on offspring has been recognized for centuries, but only recently have we begun to gain molecular insight into the mechanisms involved in alcohol teratogenesis. Genetic attributes (susceptibility and protective alleles) of the mother and the fetus contribute to the risk of developing FASD and specific additional environmental conditions, including malnutrition, have an important role. The severity of FASD depends on the level of alcohol exposure, the developmental stage at which exposure occurs and the nature of the exposure (chronic or acute), and although the most vulnerable period is during the first trimester, damage can occur throughout gestation. Preconception alcohol exposure can also have a detrimental effect on the offspring. Several developmental pathways are affected in FASD, including nervous system development, growth and remodeling of tissues, as well as metabolic pathways that regulate glucocorticoid signaling and balanced levels of retinol, insulin and nitric oxide. A body of knowledge has accumulated to support the role of environmentally induced epigenetic remodeling during gametogenesis and after conception as a key mechanism for the teratogenic effects of FASD that persist into adulthood. Transgenerational effects are likely to contribute to the global burden of alcohol-related disease. FASD results in lifelong disability and preventative programs should include both maternal alcohol abstention and preconception alcohol avoidance.