Twenty-four male undergraduates acquired tolerance during three sessions where they received moderate doses of alcohol (0.62 g/kg) and repeatedly performed a motor skill task with immediate knowledge of results (KR) on each trial. Subjects were assigned to one of four groups (n=6) before a retention test session where two groups received alcohol and two expected alcohol but received a placebo. The effect on tolerance retention of withholding KR was tested in alcohol group A. The effect of an incentive in the absence of KR was examined in the other alcohol group (AM) that was offered a delayed monetary reward for nonimpaired performance. Both alcohol groups failed to retain tolerance and their impairment did not differ. The effect of substituting the incentive for KR on a drug-compensatory response to placebo was examined in group PM by comparing its performance to group PC where KR was continued. A compensatory response (i.e., performance superior to drug-free baseline) was displayed by the PC group but not by group PM. Thus, despite a monetary incentive to perform well, tolerance to alcohol and a compensatory response to placebo were both disrupted by withholding KR. The results were interpreted in terms of the information about performance conveyed by KR.