Habituation is a fundamental form of behavioral plasticity that permits organisms to ignore inconsequential stimuli. Here we describe the habituation of a locomotor response to ethanol and other odorants in Drosophila, measured by an automated high‐throughput locomotor tracking system. Flies exhibit an immediate and transient startle response upon exposure to a novel odor. Surgical removal of the antennae, the fly's major olfactory organs, abolishes this startle response. With repeated discrete exposures to ethanol vapor, the startle response habituates. Habituation is reversible by a mechanical stimulus and is not due to the accumulation of ethanol in the organism, nor to non‐specific mechanisms. Ablation or inactivation of the mushroom bodies, central brain structures involved in olfactory and courtship conditioning, results in decreased olfactory habituation. In addition, olfactory habituation to ethanol generalizes to odorants that activate separate olfactory receptors. Finally, habituation is impaired in rutabaga, an adenylyl cyclase mutant isolated based on a defect in olfactory associative learning. These data demonstrate that olfactory habituation operates, at least in part, through central mechanisms. This novel model of olfactory habituation in freely moving Drosophila provides a scalable method for studying the molecular and neural bases of this simple and ubiquitous form of learning.