This paper describes the molecular response of Lactococcus lactis NZ9700 to ethanol. This strain is a well-known nisin producer and a lactic acid bacteria (LAB) model strain. Global transcriptome profiling using DNA microarrays demonstrated a bacterial adaptive response to the presence of 2% ethanol in the culture broth and differential expression of 67 genes. The highest up-regulation was detected for those genes involved in arginine degradation through the arginine deiminase (ADI) pathway (20–40 fold up-regulation). The metabolic responses to ethanol of wild type L. lactis strains were studied and compared to those of regulator-deletion mutants MG∆argR and MG∆ahrC. The results showed that in the presence of 2% ethanol those strains with an active ADI pathway reached higher growth rates when arginine was available in the culture broth than in absence of arginine. In a chemically defined medium strains with an active ADI pathway consumed arginine and produced ornithine in the presence of 2% ethanol, hence corroborating that arginine catabolism is involved in the bacterial response to ethanol. This is the first study of the L. lactis response to ethanol stress to demonstrate the relevance of arginine catabolism for bacterial adaptation and survival in an ethanol containing medium.