Recent studies have shown that exposure to some nutritional supplements and chemicals in utero can affect the epigenome of the developing mouse embryo, resulting in adult disease. Our hypothesis is that epigenetics is also involved in the gestational programming of adult phenotype by alcohol. We have developed a model of gestational ethanol exposure in the mouse based on maternal ad libitum ingestion of 10 (v/v) ethanol between gestational days 0.5-8.5 and observed changes in the expression of an epigenetically-sensitive allele, Agouti viable yellow (A(vy)), in the offspring. We found that exposure to ethanol increases the probability of transcriptional silencing at this locus, resulting in more mice with an agouti-colored coat. As expected, transcriptional silencing correlated with hypermethylation at A(vy). This demonstrates, for the first time, that ethanol can affect adult phenotype by altering the epigenotype of the early embryo. Interestingly, we also detected postnatal growth restriction and craniofacial dysmorphology reminiscent of fetal alcohol syndrome, in congenic a/a siblings of the A(vy) mice. These findings suggest that moderate ethanol exposure in utero is capable of inducing changes in the expression of genes other than A(vy), a conclusion supported by our genome-wide analysis of gene expression in these mice. In addition, offspring of female mice given free access to 10 (v/v) ethanol for four days per week for ten weeks prior to conception also showed increased transcriptional silencing of the A(vy) allele. Our work raises the possibility of a role for epigenetics in the etiology of fetal alcohol spectrum disorders, and it provides a mouse model that will be a useful resource in the continued efforts to understand the consequences of gestational alcohol exposure at the molecular level.