The Wood–Ljungdahl pathway is an ancient metabolic route used by acetogenic carboxydotrophs to convert CO into acetate, and some cases ethanol. When produced, ethanol is generally seen as an end product of acetogenic metabolism, but here we show that it acts as an important intermediate and co-substrate during carboxydotrophic growth of Clostridium autoethanogenum. Depending on CO availability, C. autoethanogenum is able to rapidly switch between ethanol production and utilization, hereby optimizing its carboxydotrophic growth. The importance of the aldehyde ferredoxin:oxidoreductase (AOR) route for ethanol production in carboxydotrophic acetogens is known; however, the role of the bifunctional alcohol dehydrogenase AdhE (Ald–Adh) route in ethanol metabolism remains largely unclear. We show that the mutant strain C. autoethanogenum ∆adhE1a, lacking the Ald subunit of the main bifunctional aldehyde/alcohol dehydrogenase (AdhE, CAETHG_3747), has poor ethanol oxidation capabilities, with a negative impact on biomass yield. This indicates that the Adh–Ald route plays a major role in ethanol oxidation during carboxydotrophic growth, enabling subsequent energy conservation via substrate-level phosphorylation using acetate kinase. Subsequent chemostat experiments with C. autoethanogenum show that the wild type, in contrast to ∆adhE1a, is more resilient to sudden changes in CO supply and utilizes ethanol as a temporary storage for reduction equivalents and energy during CO-abundant conditions, reserving these ‘stored assets’ for more CO-limited conditions. This shows that the direction of the ethanol metabolism is very dynamic during carboxydotrophic acetogenesis and opens new insights in the central metabolism of C. autoethanogenum and similar acetogens.