This study examines hypotheses about alcohol's effects on sexual judgments based on both alcohol and misperception theories. It was hypothesized that gender, alcohol consumption and alcohol expectancy set would influence perceptions of sexuality. Participants were unacquainted women and men (88 dyads) who interacted for 15 minutes within the context of the balanced placebo design. After the conversation ended, participants answered questions about their behavior and their partners' behavior. Conversations were videotaped and coded by trained raters. Men perceived their female partner and themselves as behaving more sexually than women perceived their male partner and themselves. When alcohol was consumed, both women and men were perceived as behaving more sexually and in a more disinhibited manner than when alcohol was not consumed. Ratings made by members of white and black dyads were largely comparable. Trained observers coded participants' use of active attention and dating availability cues. Both types of cues interacted with alcohol consumption such that intoxicated participants exaggerated the meaning of strong (dating availability) cues and ignored the meaning of ambiguous (active attention) cues when making sexual judgments. Supporting past research on gender differences in perceptions of sexuality, men were more sexually attracted to their opposite-sex partner than women were. Both women's and men's sexual judgments were influenced by alcohol consumption but not by alcohol expectancy set. Intoxicated participants' responses to their partners' behavioral cues supported cognitive impairment models of alcohol's effects. The implications of these findings for theories about alcohol's effects on sexuality and for prevention programming are discussed.