Ethanol has been used by humans since prehistory as the intoxicating ingredient in alcoholic beverages. Absolute ethanol was first obtained in 1796 by Johann Tobias Lowitz, by filtering distilled ethanol through charcoal.

Ethanol was first prepared synthetically in 1826, through the independent efforts of Henry Hennel in Britain and S.G. Sérullas in France. Michael Faraday prepared ethanol by the acid-catalyzed hydration of ethylene in 1828, in a process similar to that used for industrial ethanol synthesis today.

Ethanol has been used as fuel in the United States since at least 1908 with the Ford Model T which could be modified to run on either gasoline or pure alcohol. Henry Ford designed the famed Model T Ford to run on alcohol saying that it was "the fuel of the future". Ethanol was used well into the 1920's and 1930's to fuel cars alongside an effort to sustain a US ethanol program. Growth in fuel ethanol in the United States is largely being driven by financial incentives that naturally exist when oil prices are over a certain level.