Alcohol is likely to affect neurons nonselectively, and the understanding of its action in the CNS requires elucidation of underlying neuronal circuits and associated cellular processes. We have identified a Drosophila signaling system, comprising neurons expressing neuropeptide F (NPF, a homolog of mammalian neuropeptide Y) and its receptor, NPFR1, that acutely mediates sensitivity to ethanol sedation. Flies deficient in NPF/NPFR1 signaling showed decreased alcohol sensitivity, whereas those overexpressing NPF exhibited the opposite phenotype. Furthermore, controlled functional disruption of NPF or NPFR1 neurons in adults rapidly confers resistance to ethanol sedation. Finally, the NPF/NPFR1 system selectively mediates sedation by ethanol vapor but not diethyl ether, indicating that the observed NPF/NPFR1 activity reflects a specialized response to alcohol sedation rather than a general response to intoxication by sedative agents. Together, our results provide the molecular and neural basis for the strikingly similar alcohol-responsive behaviors between flies and mammals.