The effect of alcohol on judgement or conscious risk-taking may increase the likelihood of an automobile accident. This study examined the direct effects of penalty severity and alcohol on risk-taking in a novel simulated-driving lane-choice task. Thirteen male social drinkers received alcohol (0.3 g/kg, 0.5 g/kg, 0.8 g/kg) or placebo during each of four test sessions in a randomized, within subject design. In repeated trials, subjects selected, then drove through a cone-defined lane. Contingent upon performance, points were added (+ 5 for the narrower lane, + 3 for the wider lane) and taken away (- 1, - 3, or - 5 points per hit cone) after each trial. Risk-taking was defined as a selection of the narrower-width lane. The frequency of risk-taking decreased as the penalty increased. The 0.5 g/kg dose, compared to other alcohol doses or placebo, significantly increased risk-taking in the high-risk (5-point penalty) condition. This finding suggests that breath alcohol concentrations within current legal standards can alter a driver's decision-making such that the willingness to enter a high-risk situation is increased.