Developmental exposure to alcohol can produce characteristic physiological and cognitive deficits, often termed Fetal Alcohol Spectrum Disorder (FASD). More recently, social deficits have been shown to occur both in FASD and animal models of FASD; the behavioral and neural bases of these deficits remain to be determined. It was hypothesized that changes in sensory processing may in part underlie the social deficits seen in FASD. This study used a rat model of FASD and social play, a behavior critical to adult social functioning, to begin to examine this hypothesis. Somatosensory cues from dorsal contact to the nape of the neck, critical to the initiation of pinning, were systematically degraded by administration of different doses of xylocaine, a topical anesthetic. Neuronal activity after 1 h of play was assessed by measurement of c-Fos immunoreactivity (IR) in different brain regions. Ethanol-exposed rats showed an increased frequency of pinning during social play and were more sensitive to the degradation of somatosensory cues compared to the control groups, suggesting difficulties in processing somatosensory cues. Neuronal activity in the somatosensory cortex induced by play was significantly decreased in the ethanol-exposed group compared to the non-treated group. The c-Fos IR in the nucleus accumbens was altered in a sexually dimorphic manner in the ethanol-exposed group. Thus, the behavioral and brain measures are consistent with the hypothesis that ethanol exposure during development induces alterations in social play via deficits in processing somatosensory cues that are important to social play.