We have combined experiments with atomic-scale molecular dynamics simulations to consider the influence of ethanol on a variety of lipid membrane properties. We first employed isothermal titration calorimetry together with the solvent-null method to study the partitioning of ethanol molecules into saturated and unsaturated membrane systems. The results show that ethanol partitioning is considerably more favorable in unsaturated bilayers, which are characterized by their more disordered nature compared to their saturated counterparts. Simulation studies at varying ethanol concentrations propose that the partitioning of ethanol depends on its concentration, implying that the partitioning is a nonideal process. To gain further insight into the permeation of alcohols and their influence on lipid dynamics, we also employed molecular dynamics simulations to quantify kinetic events associated with the permeation of alcohols across a membrane, and to characterize the rotational and lateral diffusion of lipids and alcohols in these systems. The simulation results are in agreement with available experimental data and further show that alcohols have a small but non-vanishing effect on the dynamics of lipids in a membrane. The influence of ethanol on the lateral pressure profile of a lipid bilayer is found to be prominent: ethanol reduces the tension at the membrane-water interface and reduces the peaks in the lateral pressure profile close to the membrane-water interface. The changes in the lateral pressure profile are several hundred atmospheres. This supports the hypothesis that anesthetics may act by changing the lateral pressure profile exerted on proteins embedded in membranes.