In fetal alcohol syndrome (FAS), cerebellar hypoplasia is associated with impaired insulin-stimulated survival signaling. This study characterizes ethanol dose-effects on cerebellar development, expression of genes required for insulin and insulin-like growth factor (IGF) signaling, and the upstream mechanisms and downstream consequences of impaired signaling in relation to acetylcholine (ACh) homeostasis. Pregnant Long Evans rats were fed isocaloric liquid diets containing 0%, 2%, 4.5%, 6.5%, or 9.25% ethanol from gestation day 6. Ethanol caused dose-dependent increases in severity of cerebellar hypoplasia, neuronal loss, proliferation of astrocytes and microglia, and DNA damage. Ethanol also reduced insulin, IGF-I, and IGF-II receptor binding, insulin and IGF-I receptor tyrosine kinase activities, ATP, membrane cholesterol, and choline acetyltransferase (ChAT) expression. In vitro studies linked membrane cholesterol depletion to impaired insulin receptor binding and insulin-stimulated ChAT. In conclusion, cerebellar hypoplasia in FAS is mediated by insulin/IGF resistance with attendant impairments in energy production and ACh homeostasis.