Ethanol has been considered as a lifestyle factor that may influence the risk of type 2 diabetes mellitus. In healthy adults, acute ethanol consumption results in insulin resistance. Acute ethanol consumption causes insulin resistance selectively in skeletal muscle by an indirect mechanism. Possible mediators include triglycerides (TGs), catecholamines, acetaldehyde, alterations in insulin binding, and hepatic insulin sensitizing substance (HISS). Recent studies in rats showed that acute administration of ethanol causes insulin resistance in a dose-dependent manner that is secondary to the blockade of insulin-induced HISS release. Chronic ethanol consumption may improve insulin sensitivity, but the results from the randomized controlled trials are mixed. Differences in ethanol dose, consumption period, and abstention period may account for the discrepant results. Epidemiological studies have suggested that the relationship between ethanol and insulin sensitivity is either an inverted U-shape or a positive linear relationship. Future randomized controlled trials should consider the dose of ethanol and the duration of ethanol consumption and abstention in the experimental design. Chronic prenatal and postnatal (nursing) ethanol exposure results in insulin resistance that is secondary to the absence of HISS release/action with the HISS-independent insulin action and insulin-like growth factor-1 (IGF-1)-mediated glucose disposal action remaining unimpaired. The impaired HISS release may be related to a reduction in hepatic glutathione (GSH) levels. The effect of chronic ethanol consumption on HISS has not been evaluated.