Tolerance is an important element of drug addiction and provides a model for understanding neuronal plasticity. The hypothalamic-neurohypophysial system (HNS) is an established preparation in which to study the actions of alcohol. Acute application of alcohol to the rat neurohypophysis potentiates large-conductance calcium-sensitive potassium channels (BK), contributing to inhibition of hormone secretion. A cultured HNS explant from adult rat was used to explore the molecular mechanisms of BK tolerance after prolonged alcohol exposure. Ethanol tolerance was intrinsic to the HNS and consisted of: (1) decreased BK potentiation by ethanol, complete within 12 min of exposure, and (2) decreased current density, which was not complete until 24 hr after exposure, indicating that the two components of tolerance represent distinct processes. Single-channel properties were not affected by chronic exposure, suggesting that decreased current density resulted from downregulation of functional channels in the membrane. Indeed, we observed decreased immunolabeling against the BK alpha-subunit on the surface of tolerant terminals. Analysis using confocal microscopy revealed a reduction of BK channel clustering, likely associated with the internalization of the channel.