Signal transduction is a key process to transmit information from the extracellular milieu, and to elicit changes in the biological activity of target cells. Several cell signaling pathways can be targeted by neurotoxicants and developmental neurotoxicants. This chapter focuses on the interactions of ethanol, a known human developmental neurotoxicant, with signal transduction pathways stimulated by acetylcholine through activation of muscarinic receptors. It shows how initial observations in vivo, upon developmental exposure to ethanol, have been followed-up by a series of studies in cell culture systems which have allowed the discoveries that ethanol, by interfering with muscarinic signaling in astroglial cells, inhibits their proliferation and their ability to foster neuronal differentiation. Such effects of alcohol may be related to microencephaly and abnormal neuronal development, two hallmarks of the fetal alcohol syndrome.