We have expanded neuroepithelial cells dissociated from the embryonic rat telencephalon in serum-free defined medium containing basic fibroblast growth factor (bFGF) in order to generate a model neuroepithelium to study the interaction of ethanol with both growth factor- and transmitter-stimulated proliferation. Ethanol blocked proliferation stimulated by bFGF and by carbachol, an agonist at muscarinic acetylcholine receptors, in a dose-dependent manner. In addition, ethanol attenuated autonomous expansion of neuroepithelial cells occurring following withdrawal of bFGF. The latter effect was associated with an increase in the number of apoptotic cells identified by terminal deoxynucleotidyltransferase-mediated dUTP nick end labeling labeling. We studied the effects of ethanol on carbachol-stimulated signaling pathways critical to its proliferative effects. Ethanol significantly reduced carbachol-stimulated Ca(2+) signaling, as well as Erk1/Erk2, Akt and cyclic AMP-response element-binding phosphorylations in a dose-dependent manner. Comparison of the potency of ethanol in attenuating carbachol-stimulated proliferation and signal transduction showed that mitogen-activated protein kinase phosphorylation was less sensitive to ethanol than the other parameters. The results indicate that ethanol's suppression of proliferation induced by carbachol in this model neuroepithelium likely involves multiple signaling pathways. These effects in vitro may help to explain the devastating effects of prenatal ethanol exposure in vivo, which contribute to the fetal alcohol syndrome.