C hronic ethanol consumption induces hepatocellular retention of nascent proteins leading to hepatomegaly. While the molecular mechanisms behind this impairment are undefined, it has been predicted that protein retention results from a disruption of vesicle-mediated secretory processes. Small GTP-binding proteins (rab proteins) have recently been implicated in the regulation of vesicular trafficking in eukaryotic cells. Our objectives were to identify intracellular sites of ethanol-induced protein retention and to determine whether the distribution of secretory rab proteins was altered by ethanol. Transport of hepatic proteins along the secretory pathway in livers from control and ethanol-fed rats was analyzed using subcellular fractionation and immunoprecipitation in the context of in vivo pulse-chase experiments. We show that pre-Golgi and Golgi compartments, as well as secretory vesicles, are sites of ethanol-induced retention of nascent soluble and transmembrane secretory proteins. These results are supported by immunofluorescence localization of hepatic proteins on liver sections. Further, immunoblot analyses of hepatic subcellular fractions from ethanol-damaged livers indicate a dramatic reduction in the association of rab2 with a Golgi compartment as compared with controls. In contrast, rab6 and alpha-mannosidase II, Golgi marker proteins, appear unchanged. These studies provide a detailed analysis of the intracellular site of ethanol-induced protein retention in the hepatocyte and lend novel insight into a potential mechanism behind this impairment. The effects of ethanol exposure on rab proteins and Golgi function are discussed.