In this review, the authors examine how psychophysiological research might better contribute to understanding the effects of alcohol on human emotion. They propose that future studies would benefit from greater use of contemporary theories of emotion that emphasize a dimensional structure of affective expression, incorporating the parameters of emotional arousal and emotional valence. Evidence suggests that, although alcohol exerts an overall dampening effect on arousal, it appears to modulate emotional response through its effects on higher order associative processes rather than at the level of primary brain motivational systems. They discuss methodological implications of this multidimensional, multilevel approach and suggest that alcohol-induced physiological changes need to be investigated as dynamic response patterns rather than isolated events tied to solitary measures.