Synonymous and noncoding single nucleotide polymorphisms (SNPs) in the KCNJ6 gene, encoding G protein-gated inwardly rectifying potassium channel subunit 2 (GIRK2), have been linked with increased electroencephalographic frontal theta event-related oscillations (ERO) in subjects diagnosed with alcohol use disorder (AUD). To identify molecular and cellular mechanisms while retaining the appropriate genetic background, we generated induced excitatory glutamatergic neurons (iN) from iPSCs derived from four AUD-diagnosed subjects with KCNJ6 variants (“Affected: AF”) and four control subjects without variants (“Unaffected: UN”). Neurons were analyzed for changes in gene expression, morphology, excitability and physiological properties. Single-cell RNA sequencing suggests that KCNJ6 AF variant neurons have altered patterns of synaptic transmission and cell projection morphogenesis. Results confirm that AF neurons express lower levels of GIRK2, have greater neurite area, and elevated excitability. Interestingly, exposure to intoxicating concentrations of ethanol induces GIRK2 expression and reverses functional effects in AF neurons. Ectopic overexpression of GIRK2 alone mimics the effect of ethanol to normalize induced excitability. We conclude that KCNJ6 variants decrease GIRK2 expression and increase excitability and that this effect can be minimized or reduced with ethanol.