Alcohol intoxication interferes with the capacity to inhibit maladaptive reactions and execute correct responses. In order to investigate alcohol’s effects on cognitive control, a group of healthy subjects (N = 20, 9 women) participated in both alcohol (0.6 g/kg ethanol) and placebo conditions in a color version of the Eriksen flanker task. MEG signal was recorded from the whole head and the noise-normalized minimum norm inverse estimates were anatomically constrained to each person’s cortical surface reconstructed from MRI. Alcohol increased error rates in the response-conflict condition. Under placebo, the anterior cingulate (AC) was sensitive to the level of conflict, supporting an optimized response strategy. Alcohol blunted this conflict-induced differentiation in AC activity. This suggests that alcohol impairs cognitive control by affecting top-down regulation of response preparation and execution. Alcohol-induced impairment of executive functions may result in poor self-control, expressed as socially-inappropriate behavior and an inability to refrain from drinking.