In this review, we detail the clinical evidence supporting the role of psychological and physiological stress in instrumental motivation for alcohol consumption during the development of mild to moderate alcohol use disorders (AUDs) and in the compulsive, habitual alcohol consumption seen in severe, chronic, relapsing AUDs. Traditionally, the study of AUDs has focused on the direct and indirect effects of alcohol on striatal dopaminergic pathways and their role in the reinforcing effects of alcohol. However, growing evidence also suggests that alcohol directly stimulates the hypothalamic pituitary adrenal (HPA) axis and has effects on glucocorticoid receptors in extrahypothalamic, limbic forebrain, and medial Prefrontal Cortex (PFC) circuits, which contribute to the development of AUDs and their progression in severity, chronicity, and relapse risk. Evidence indicates HPA axis, glucocorticoid, and PFC dysfunction during protracted withdrawal and under high arousal conditions in those with severe AUDs, and novel evidence is also emerging to suggest HPA axis dysfunction with binge/heavy drinking, which is associated with motivation for alcohol in non-dependent individuals. Specifically, alcohol-associated alterations in HPA axis responses to stress and alcohol cues may serve as interoceptive physiological signals and facilitate conditioning mechanisms to influence alcohol motivation. Thus, this dysfunction may serve as a potential biomarker of both risk and of relapse. Based on this emerging data, we conceptualize and present early evidence for treatment targets that may improve PFC function and/or normalize HPA axis functioning and may be beneficial in the treatment and relapse prevention of AUDs. Finally, we suggest that individual differences in alcohol-related pathophysiology in these circuits may modulate treatment and recovery response, thereby supporting the need for building personalized medicine algorithms to understand and treat AUDs.