One of the unique features of prenatal alcohol exposure in humans is impaired cognitive and behavioral function resulting from damage to the central nervous system (CNS), which leads to a spectrum of impairments referred to as fetal alcohol spectrum disorder (FASD). Human FASD phenotypes can be reproduced in the rodent CNS following prenatal ethanol exposure. Several mechanisms are expected to contribute to the detrimental effects of prenatal alcohol exposure on the developing fetus, particularly in the developing CNS. These mechanisms may act simultaneously or consecutively and differ among a variety of cell types at specific developmental stages in particular brain regions. Studies have identified numerous potential mechanisms through which alcohol can act on the fetus. Among these mechanisms are increased oxidative stress, mitochondrial damage, interference with the activity of growth factors, glia cells, cell adhesion molecules, gene expression during CNS development and impaired function of signaling molecules involved in neuronal communication and circuit formation. These alcohol-induced deficits result in long-lasting abnormalities in neuronal plasticity and learning and memory and can explain many of the neurobehavioral abnormalities found in FASD. In this review, the author discusses the mechanisms that are associated with FASD and provides a current status on the endocannabinoid system in the development of FASD.