The abnormal physicochemical characteristics of ethanol solvation in water are commonly attributed to the phenomenon of hydrophobic hydration. To investigate the structural organization of hydrophobic hydration in water-ethanol mixtures, we use molecular dynamics simulations based on detailed atomic models. Induced polarization is incorporated into the potential function on the basis of the classical Drude oscillator model. Water-ethanol mixtures are simulated at 11 ethanol molar fractions, from 0.05 to 0.9. Although the water and ethanol models are parametrized separately to reproduce the vaporization enthalpy, static dielectric constant, and self-diffusion constant of neat liquids at ambient conditions, they also reproduce the energetic and dynamical properties of the mixtures accurately. Furthermore, the calculated dielectric constant for the various wateralcohol mixtures is in excellent agreement with experimental data. The simulations provide a detailed structural characterization of the mixtures. A depletion of water-water hydrogen bonding in the first hydration shell of ethanol is compensated by an enhancement in the second hydration shell. The structuring effect from the second solvation shell gives rise to a net positive hydrogen-bonding excess for ethanol molar fractions up to similar or equal to 0.5. For larger molar fractions, the second hydration shell is not sufficiently populated to overcome the net H-bond depletion from the first shell.