Alcohol impairs the host immune system, rendering the host more vulnerable to infection. Therefore, alcoholics are at increased risk of acquiring serious bacterial infections caused by Streptococcus pneumoniae, including pneumonia. Nevertheless, how alcohol affects pneumococcal virulence remains unclear. Here, we showed that the S. pneumoniae type 2 D39 strain is ethanol tolerant and that alcohol upregulates alcohol dehydrogenase E (AdhE) and potentiates pneumolysin (Ply). Hemolytic activity, colonization, and virulence of S. pneumoniae, as well as host cell myeloperoxidase activity, proinflammatory cytokine secretion, and inflammation, were significantly attenuated in adhE mutant bacteria (ΔadhE strain) compared to D39 wild-type bacteria. Therefore, AdhE might act as a pneumococcal virulence factor. Moreover, in the presence of ethanol, S. pneumoniae AdhE produced acetaldehyde and NADH, which subsequently led Rex (redox-sensing transcriptional repressor) to dissociate from the adhE promoter. An increase in AdhE level under the ethanol condition conferred an increase in Ply and H2O2 levels. Consistently, S. pneumoniae D39 caused higher cytotoxicity to RAW 264.7 cells than the ΔadhE strain under the ethanol stress condition, and ethanol-fed mice (alcoholic mice) were more susceptible to infection with the D39 wild-type bacteria than with the ΔadhE strain. Taken together, these data indicate that AdhE increases Ply under the ethanol stress condition, thus potentiating pneumococcal virulence.