Primary cultures of cerebral glia derived from newborn rat brain were utilized to evaluate the effects of ethanol on DNA synthesis and cellular differentiation. Glutamine synthetase was employed as a marker for astrocytic differentiation and 2′,3′-cyclic nucleotide 3′-phosphohydrolase (CNP), for oligodendroglial differentiation. Concentrations of ethanol of 17–86 mM, i.e., a concentration range comparable to that observed in humans, were utilized. No effect of ethanol on DNA synthesis was observed, despite the use of synchronized cultures. Similarly, no effect of ethanol on the developmental increase of glutamine synthetase activity was seen, despite the use of astrocytes purified by the selective detachment technique and a prolonged duration of exposure to ethanol (17 days). In contrast, however, a striking enhancement of CNP activity was demonstrable in both mixed glial cultures and in oligodendroglia purified by the selective detachment technique. In the latter cells, the stimulatory effect of ethanol was evident within 9 days of exposure, and after 17 days of exposure, ethanol-treated cells exhibited a two-fold higher CNP activity than did control cells. This peak effect was observed at an ethanol concentration of only 17 mM. Thus, these data indicate that (1) clinically relevant concentrations of ethanol have no effect on either DNA synthesis or on at least one expression of astrocytic differentiation in glial primary cultures, but (2) these concentrations exert a striking enhancement of CNP activity, a marker of oligodendroglial differentiation. The findings have implications both for the effects of ethanol on the developing nervous system and the regulation of oligodendroglial differentiation.