Today, Brazil has one of the most diverse energy systems in the world. The sugar-based ethanol industry plays a pivotal role in that achievement, yet scholars of energy development have focused little on ethanol. This article examines the history of the sugar-based ethanol industry from its beginning in the 1930s to the creation of the state-led program Proálcool (the National Ethanol Program) in 1975 and the ethanol-fueled car in 1979. This article demonstrates how federal and private actors connected nationalist goals of a modern, industrial Brazilian identity to ethanol in order to sustain the industry against the vagaries of the sugar market. Drawing from production data, the monthly sugar industry journal Brasil Açucareiro, newspapers, government funding applications for privately owned ethanol distilleries, and oral interviews, it highlights how the idea of a nationally developed technology and domestic industry etched a long-term place for the ethanol industry in the nation’s energy strategy.