Ethanol increases apoptotic neuron death in the developing brain and at least part of this may be mediated by oxidative stress. In cultured fetal rat cortical neurons, Ethanol increases levels of reactive oxygen species (ROS) within minutes of exposure and reduces total cellular glutathione (GSH) shortly thereafter. This is followed by onset of apoptotic cell death. These responses to Ethanol can be blocked by elevating neuron GSH with N-acetylcysteine or by co-culturing neurons with neonatal cortical astrocytes. We describe here mechanisms by which the astrocyte-neuron gamma-glutamyl cycle is up-regulated by Ethanol, enhancing control of neuron GSH in response to the pro-oxidant, Ethanol. Up to 6 days of Ethanol exposure had no consistent effects on activities of gamma-glutamyl cysteine ligase or glutathione synthetase, and GSH content remained unchanged (p < 0.05). However, glutathione reductase was increased with 1 and 2 day Ethanol exposures, 25% and 39% for 2.5 and 4.0 mg/mL Ethanol by 1 day, and 11% and 16% for 2.5 and 4.0 mg/mL at 2 days, respectively (p < 0.05). A 24 h exposure to 4.0 mg/mL Ethanol increased GSH efflux from astrocyte up to 517% (p < 0.05). Ethanol increased both gamma-glutamyl transpeptidase expression and activity on astrocyte within 24 h of exposure (40%, p = 0.05 with 4.0 mg/mL) and this continued for at least 4 days of Ethanol treatment. Aminopeptidase N activity on neurons increased by 62% and 55% within 1 h of Ethanol for 2.5 and 4.0 mg/mL concentration, respectively (p < 0.05), remaining elevated for 24 h of treatment. Thus, there are at least three key points of the gamma-glutamyl cycle that are up-regulated by Ethanol, the net effect being to enhance neuron GSH homeostasis, thereby protecting neurons from Ethanol-mediated oxidative stress and apoptotic death.