Rationale Social cognition influences social interactions. Alcohol reportedly facilitates social interactions. However, the acute effects of alcohol on social cognition are relatively poorly studied. We investigated the effects of alcoholic or non-alcoholic beer on emotion recognition, empathy, and sexual arousal using the dynamic face emotion recognition task (FERT), Multifaceted Empathy Test (MET), and Sexual Arousal Task (SAT) in a double-blind, random-order, cross-over study in 60 healthy social drinkers. We also assessed subjective effects using visual analog scales (VASs), blood alcohol concentrations, and plasma oxytocin levels. Alcohol increased VAS ratings of stimulated, happy, talkative, open, and want to be with others. The subjective effects of alcohol were greater in participants with higher trait inhibitedness. Alcohol facilitated the recognition of happy faces on the FERT and enhanced emotional empathy for positive stimuli on the MET, particularly in participants with low trait empathy. Pictures of explicit sexual content were rated as less pleasant than neutral pictures after non-alcoholic beer but not after alcoholic beer. Explicit sexual pictures were rated as more pleasant after alcoholic beer compared with non-alcoholic beer, particularly in women. Alcohol did not alter the levels of circulating oxytocin. Alcohol biased emotion recognition toward better decoding of positive emotions and increased emotional concern for positive stimuli. No support was found for a modulatory role of oxytocin. Alcohol also facilitated the viewing of sexual images, consistent with disinhibition, but it did not actually enhance sexual arousal. These effects of alcohol on social cognition likely enhance sociability. www.clinicaltrials.gov/ct2/show/NCT02318823 RefTarget Address="http://www.clinicaltrials.gov/ct2/show/NCT02318823" TargetType="URL"/>