Ethyl alcohol kills bacteria mainly through 2 mechanisms: protein denaturation and dissolving the lipid membrane.

Proteins, the machinery of the cell, must be dissolved in water in order to properly function. When one puts a protein in ethanol (ethyl alcohol), the protein can not function properly and becomes denatured. Also, bacteria are surrounded by a lipid membrane (fatty acids). The membrane is held together because the alkane chain of a fatty acid is hydrophobic, and thus buries itself amongst other lipids. However, the lipids will freely dissolve in ethanol, causing a disruption of the bacterial membrane. This ruptures the bacteria so it can no longer live.

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Ethyl alcohol (also called ethanol) kills bacteria by dissociating/dissolving the bacteria's cellular membrane (the part that holds everything together)... it would be sort of like having something that could dissolve all of your skin (yikes!), all of your insides would fall out and everything would stop working if it wasn't held together.The way ethanol dissolves a cell membrane is by having one end that dissolves well in water (the one with the OH) and the other end that dissolves well in fatty/greasy like substances (the end with the CH₂CH₃). Bacteria cell membranes are like water on the outside and like fat on the inside, so when you apply ethanol to a cell membrane, instead of all the parts of the membrane sticking together, they'll associate with the ethanol causing the membrane to fall apart.