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Ethanol is a clean-burning, high-octane fuel that is produced from renewable sources. At its most basic, ethanol is grain alcohol, produced from crops such as corn.
Because it is domestically produced, ethanol helps reduce America's dependence upon foreign sources of energy.
Pure, 100% ethanol is not generally used as a motor fuel; instead, a percentage of ethanol is combined with unleaded gasoline. This is beneficial because the ethanol:

Decreases the fuel's cost
Increases the fuel's octane rating
Decreases gasoline's harmful emissions Increases engine performance.

Any amount of ethanol can be combined with gasoline, but the most common blends are:

E10 - 10% ethanol and 90% unleaded gasoline (the majority of fuel sold at gas stations)

E10 is approved for use in any make or model of vehicles sold in the U.S. Many automakers recommend its use because of its high performance, clean-burning characteristics. In 2004, about one-third of America's gasoline was blended with ethanol, most in this 10% variety. In the last year almost all gasoline sold in Maryland is actually E10. Ethanol replaced MTBE (methyl-t-butyl ether) as a fuel addative after numerous cases of undergound storage tanks leaking and contaminating local drinking water for years.

E85 - 85% ethanol and 15% unleaded gasoline

E85 is an alternative fuel for use in flexible fuel vehicles (FFVs). There are currently more than 4 million FFVs on America's roads today, and automakers are rolling out more each year. In conjunction with more flexible fuel vehicles, more E85 pumps are being installed across the country. When E85 is not avaialble, these FFVs can operate on straight gasoline or any ethanol blend up to 85%.