Alcohols affect a wide array of biological processes including protein folding, neurotransmission and immune responses. It is becoming clear that many of these effects are mediated by direct binding to proteins such as neurotransmitter receptors and signaling molecules. This review summarizes the unique chemical properties of alcohols which contribute to their biological effects. It is concluded that alcohols act mainly as hydrogen bond donors whose binding to the polypeptide chain is stabilized by hydrophobic interactions. The electronegativity of the O atom may also play a role in stabilizing contacts with the protein. Properties of alcohol binding sites have been derived from X-ray crystal structures of alcohol-protein complexes and from mutagenesis studies of ion channels and enzymes that bind alcohols. Common amino acid sequences and structural features are shared among the protein segments that are involved in alcohol binding. The alcohol binding site is thought to consist of a hydrogen bond acceptor in a turn or loop region that is often situated at the N-terminal end of an alpha-helix. The methylene chain of the alcohol molecule appears to be accommodated by a hydrophobic groove formed by two or more structural elements, frequently a turn and an alpha-helix. Binding at these sites may alter the local protein structure or displace bound solvent molecules and perturb the function of key proteins.