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When Prohibition was made law in 1919, taking effect in 1920, there needed to be a law passed to enforce the 18th Amendment. The Republican Congressman from Minnesota, Andrew John Volstead, introduced the enforcement law to Congress and it passed on October 19, 1919, but was vetoed by President Woodrow Wilson on the grounds that wartime Prohibition made the law unnecessary. Congress then overturned the veto. The law became known as the Volstead Act.

The law defined intoxicating liquor as any substance with more than 0.5 percent alcohol by volume. The law included penalties for liquor sales and search and seizure procedures. Private stocks of liquor purchased before January 17, 1920 were immune to the law and many people built up stocks of liquor before the law came into effect. Section 37 of the law made provisions for the sale of medicinal spirits, but they could only be purchased with a prescription from a doctor. Federal licenses were to be issued for the sale of medicinal spirits. The companies with these licenses were American Medicinal Spirits (later to become National Distillers), Glenmore Distillery, Schenley Distillery, Frankfort Distillery, Brown-Forman Distillery and A. Ph. Stitzel Distillery. 

Some States, including New York and Montana, refused to spend any State money enforcing the law. This made the law ineffective in a large part of the country. Even States that embraced the law found it hard to enforce and liquor flowed freely, thanks to bootleg whiskey and moonshiners. The Act was modified in March 1933 by the Cullen Act that allowed the sale of light wines and beer, not exceeding 3.2% alcohol by volume. This allowed brewing before the repeal of the 18th Amendment. The Volstead Act was repealed by the 21st Amendment to the Constitution which was ratified on December 5, 1933.