Many alcohols are produced by hydroxylation, i.e., the installation of a hydroxy group using oxygen or a related oxidant.  Hydroxylation is the means by which the body processes many poisons, converting lipophilic compounds into hydrophilic derivatives that are more readily excreted.  Enzymes called hydroxylases and oxidases facilitate these conversions. 
Many industrial alcohols, such as cyclohexanol for the production of nylon, are produced by hydroxylation.