Fetal alcohol spectrum disorder (FASD), formerly referred to as fetal alcohol syndrome, presents as craniofacial malformations, neurobehavioral disorders and mental disabilities, all attributed to exposing human embryos to alcohol during fetal development. The risk of FASD depends on the amount consumed, the frequency of consumption, and the points in pregnancy at which the alcohol is consumed. Ethanol is a known teratogen, i.e., causes birth defects. Ethanol is metabolized by alcohol dehydrogenase enzymes into acetaldehyde. The subsequent oxidation of acetaldehyde into acetate is performed by aldehyde dehydrogenase enzymes. Given that retinoic acid (RA) regulates numerous embryonic and differentiation processes, one of the proposed mechanisms for the teratogenic effects of ethanol is a competition for the enzymes required for the biosynthesis of RA from vitamin A. Animal research demonstrates that in the embryo, the competition takes place between acetaldehyde and retinaldehyde for aldehyde dehydrogenase activity. In this model, acetaldehyde inhibits the production of retinoic acid by retinaldehyde dehydrogenase. Ethanol-induced developmental defects can be ameliorated by increasing the levels of retinol, retinaldehyde, or retinaldehyde dehydrogenase. Thus, animal research supports the reduction of retinoic acid activity as an etiological trigger in the induction of FASD.