Because ethanol is thought to be a risk factor for severe hypoglycemia, patients with type 1 diabetes (T1D) are recommended to limit ethanol intake. However, little is known on how ethanol affects plasma glucose and how ethanol-induced hypoglycemia can be prevented. In this study, we systematically reviewed the literature for ethanol effects on plasma glucose and for prevention strategies on ethanol-induced hypoglycemia. Electronic searches on PubMed and Google were conducted in February 2017. Randomized clinical trials and observational studies were included. Studies involved patients with T1D with no history of ethanol abuse. The primary aims were changes in plasma glucose after ethanol intake and prevention strategies for ethanol-induced hypoglycemia. Quality of the studies was assessed by GRADE. Additionally, we searched for guidelines from diabetes associations on their suggested prevention strategies. We included 13 studies. Eight studies reported that ethanol, regardless of administration intravenously or orally, were associated with an increased risk of hypoglycemia due to decrease in plasma glucose, impaired counter-regulatory response, awareness of hypoglycemia, and cognitive function. Five studies did not report an increased risk of hypoglycemia. None of the studies investigated prevention strategies for ethanol-induced hypoglycemia. Recommendations from 13 diabetes associations were included. All associations recommend that ethanol should only be consumed with food intake. The majority of included studies showed that ethanol intake increased the risk of hypoglycemia in patients with T1D. However, the evidence for how to prevent ethanol-induced hypoglycemia is sparse, and further investigations are needed to establish evidence-based recommendations.