Immature function of the alveolar macrophage increases the risk of pulmonary infections in premature newborns. In utero alcohol increases fetal systemic oxidative stress. Because the premature lung is deficient in glutathione (GSH), we hypothesized that chronic in utero alcohol (ethanol) exposure exacerbates the oxidative stress within the developing lung, thereby impairing alveolar macrophage function. Additionally, we evaluated the effects of in vivo and in vitro GSH availability on ethanol-exposed macrophage function. Using a guinea pig model of chronic in utero ethanol exposure, fetal epithelial lining fluid (ELF) and alveolar macrophage GSH were decreased with increased markers of oxidative stress. Ethanol-exposed macrophage exhibited impaired phagocytosis and increased apoptosis compared with gestational control. When the GSH precursor S-adenosyl-methionine (SAM) was added to the maternal drinking water containing ethanol, fetal ELF and macrophage GSH were maintained and ELF oxidative stress diminished. In vivo maternal SAM therapy maintained macrophage phagocytosis and decreased apoptosis. In vitro GSH supplements also improved phagocytosis and viability in both premature and ethanol-exposed macrophage. This suggested that in utero ethanol impaired premature macrophage function and viability via decreased GSH availability. Furthermore, GSH supplementation during and after ethanol exposure improved fetal macrophage function and viability. These results add a new dimension to the detrimental effects of fetal alcohol exposure on the developing alveolar macrophage, raising the possibility of GSH therapy to augment premature alveolar macrophage function.