Ethanol affects behavior by interacting with synaptic sites at many levels of the nervous system. However, it targets most readily and at the lowest concentrations those sites mediating higher cognitive functions such as attention and memory. The memory-impairing effects of ethanol are thought to involve the hippocampus, a structure particularly vulnerable to the effects ethanol at low concentrations and early in the rising phase of the blood ethanol concentration curve. One of the early, low-dose effects of ethanol is an interruption of the normal physiological regulation of the hippocampus by the ascending septohippocampal pathway originating in the medial septal area (MSA). Ethanol enhances GABAergic transmission in the MSA, thereby reducing the regularity and vigor with which rhythmically bursting neurons of the MSA drive the hippocampal theta rhythm. Disruption of septohippocampal activity also has consequences on the response of the hippocampus to cortical inputs. Ethanol produces a loss of hippocampal responsivity that reduces the ability of the hippocampus to encode and retrieve relevant stimulus information necessary for accurate memory. This paper examines the behavioral and neural evidence for hippocampal vulnerability to ethanol and explores the hypothesis that these effects are due to ethanol disrupting septohippocampal modulation of the hippocampus, resulting in impairments of memory.