Studies have shown that ethanol at moderate concentrations inhibits epidermal growth factor-dependent replication of fetal rat hepatocytes in culture. This may account for the growth/development impairment associated with fetal alcohol syndrome and decreased liver regeneration in alcoholic liver disease. In this study, we further define the mechanism(s) of the negative impact of ethanol on fetal rat hepatocytes and provide evidence that ethanol-induced injury to these cells is associated with membrane damage caused by lipid peroxidation, altered cell glutathione homeostasis and deranged mitochondrial structure and function. Exposure of fetal rat hepatocyte replication to ethanol (2 mg/ml) promptly resulted in blockade of replication, as indicated by a 40% reduction in DNA synthesis (p < 0.05). Assessment of cell injury on the basis of lactate dehydrogenase and ALT leakage indicated a statistically significant but not appreciable effect, whereas 51Cr leakage was more substantially increased (p < 0.05). Within 6 hr of ethanol exposure, superoxide radical levels increased more than twofold (p < 0.05). We noted a 56% increase in levels of diene conjugates, a 131% increase in malonaldehyde concentration and a 66% increase in fluorescent products of lipid peroxidation (all p < 0.05). Glutathione levels were decreased to 47% below control values (p < 0.05). Electron microscopic studies illustrated a slight disruption of mitochondrial structure (enlargement of mitochondria and dilation of cristae). This disruption was accompanied by mitochondrial swelling (increased permeability), altered mitochondrial membrane potential (a 16% decrease in rhodamine uptake), a 28% decrease in succinate dehydrogenase activity and a 30% decrease in cellular ATP level (p < 0.05). Pretreatment of fetal rat hepatocytes with 0.1 mmol/L N-acetylcysteine or S-adenosylmethionine for 24 hr prevented the ethanol-induced reduction of ATP and glutathione levels, essentially restored cell replication, ameliorated 51Cr leakage and decreased malonaldehyde and diene conjugate levels to 41% to 65% and 25% above control values, respectively. Pretreatment with 0.1 mmol/L vitamin E fully normalized malonaldehyde and diene conjugate levels and 51Cr leakage but failed to improve ATP levels or to increase significantly cell replication and glutathione levels. Concomitant administration of glutathione precursors with ethanol, rather than pretreatment, did not alter the impaired cell replication. Thus our data underscore the importance of cellular glutathione and ATP in preventing ethanol-induced decreases in fetal cell replication and suggest that alleviation of cellular lipid peroxidation alone is not sufficient to prevent this abnormality in fetal rat hepatocyte function.