Earlier, we reported that gestational ethanol (E) can dysregulate neuron glutathione (GSH) homeostasis partially via impairing the EAAC1-mediated inward transport of Cysteine (Cys) and this can affect fetal brain development. In this study, we investigated if there is a role for the transulfuration pathway (TSP), a critical bio-synthetic point to supply Cys in E-induced dysregulation of GSH homeostasis. These studies utilized an in utero E binge model where the pregnant Sprague–Dawley (SD) rat dams received five doses of E at 3.5 g/kg by gastric intubation beginning embryonic day (ED) 17 until ED19 separated by 12 h. The postnatal day 7 (PN7) alcohol model employed an oral dosing of 4 g/kg body weight split into 2 feedings at 2 h interval and an iso-caloric and iso-volumic equivalent maltose-dextrin milk solution served as controls. The in vitro model consisted of cerebral cortical neuron cultures from embryonic day (ED) 16–17 fetus from SD rats and differentiated neurons from ED18 rat cerebral cortical neuroblasts. E concentrations were 4 mg/mL. E induced an accumulation of cystathionine in primary cortical neurons (PCNs), 2nd trimester equivalent in utero binge, and 3rd trimester equivalent PN7 model suggesting that breakdown of cystathionine, a required process for Cys supply is impaired. This was associated with a significant reduction in cystathionine γ-lyase (CSE) protein expression in PCN (p < 0.05) and in fetal cerebral cortex in utero (53%, p < 0.05) without a change in the expression of cystathionine β-synthase (CBS). Concomitantly, E decreased Cse mRNA expression in PCNs (by 32% within 6 h of exposure, p < 0.05) and in fetal brain (33%, p < 0.05). In parallel, knock down of CSE in differentiated rat cortical neuroblasts exaggerated the E-induced ROS, GSH loss with a pronounced caspase-3 activation and cell death. These studies illustrate the importance of TSP in CSE-related maintenance of GSH and the downstream events via Cys synthesis in neurons and fetal brain.