Folates are members of the B-class of vitamins, which are required for the synthesis of purines and pyrimidines, and for the methylation of essential biological substances, including phospholipids, DNA, and neurotransmitters. Folates cannot be synthesized de novo by mammals; hence, an efficient intestinal absorption process is required. Intestinal folate transport is carrier-mediated, pH-dependent and electroneutral, with similar affinity for oxidized and reduced folic acid derivatives. The various transporters, i.e. reduced folate carrier, proton-coupled folate transporter, folate-binding protein, and organic anion transporters, are involved in the folate transport process in various tissues. Any impairment in uptake of folate can lead to a state of folate deficiency, the most prevalent vitamin deficiency in world, affecting 10% of the population in the USA. Such impairments in folate transport occur in a variety of conditions, including chronic use of ethanol, some inborn hereditary disorders, and certain diseases. Among these, ethanol ingestion has been the major contributor to folate deficiency. Ethanol-associated folate deficiency can develop because of dietary inadequacy, intestinal malabsorption, altered hepatobiliary metabolism, enhanced colonic metabolism, and increased renal excretion. Ethanol reduces the intestinal and renal uptake of folate by altering the binding and transport kinetics of folate transport systems. Also, ethanol reduces the expression of folate transporters in both intestine and kidney, and this might be a contributing factor for folate malabsorption, leading to folate deficiency. The maintenance of intracellular folate homeostasis is essential for the one-carbon transfer reactions necessary for DNA synthesis and biological methylation reactions. DNA methylation is an important epigenetic determinant in gene expression, in the maintenance of DNA integrity and stability, in chromosomal modifications, and in the development of mutations. Ethanol, a toxin that is consumed regularly, has been found to affect the methylation of DNA. In addition to its effect on DNA methylation due to folate deficiency, ethanol could directly exert its effect through its interaction with one-carbon metabolism, impairment of methyl group synthesis, and affecting the enzymes regulating the synthesis of S-adenosylmethionine, the primary methyl group donor for most biological methylation reactions. Thus, ethanol plays an important role in the pathogenesis of several diseases through its potential ability to modulate the methylation of biological molecules. This review discusses the underlying mechanism of folate malabsorption in alcoholism, the mechanism of methylation-associated silencing of genes, and how the interaction between ethanol and folate deficiency affects the methylation of genes, thereby modulating epigenome stability and the risk of cancer.