Aims The cognitive impairment and recovery associated with chronic alcohol abuse and subsequent abstinence is well understood. However, the recovery profile following heavy episodic or 'binge' use, which is common among some Australian Aboriginal users, has not been investigated thoroughly and no empirical studies have examined chronic use in this population. The aim of this study was to identify and compare cognitive impairment and recovery associated with chronic and episodic alcohol use among Aboriginal Australians. Design Longitudinal case-control design. Setting Residential alcohol treatment programmes in northern Australia. Participants Forty chronic alcohol users, 24 episodic users and 41 healthy controls [mean age=34.24; standard deviation (SD)=9.73]. Measurements Cognitive assessments of visual motor, attention, memory, learning and executive functions at baseline (start of treatment), then 4 weeks and 8 weeks later. Reassessment of 31% of participants an average of 11 months later (SD=4.4) comparing those who remained abstinent (n=5), those who relapsed (n=11) and healthy controls (n=19). Findings At baseline, chronic and episodic alcohol users showed impaired visual motor, learning, memory and executive functions. With the exception of visual motor impairment, all deficits had improved to normal levels within 4 weeks. Visual motor deficits had normalized within 11 months. Performances did not differ at any time between chronic and episodic alcohol groups. Conclusions In Aboriginal Australians, episodic drinking is associated with similar patterns of impairment and recovery as chronic alcohol use. Most cognitive deficits appear to recover within the first month of abstinence, while persisting visual motor problems recover within 1 year.