The nationwide ban on the manufacture, sale, transportation, import and export of intoxicating beverages was brought into law by conservatives for moral and health reasons, and repealed in 1933 on economic grounds.
But to this day, pockets of Prohibition exist in the United States, with entire counties still "dry" and bootleggers still running liquor.
The movement to ban alcohol nationwide gathered steam after World War I and the introduction of income tax in the United States, economist Mark Thornton, a senior fellow at the Ludwig von Mises Institute in Alabama, told AFP.
"Income tax was introduced in 1913, and once the war was over, the world economy going again and revenue was coming in, the alcohol industry no longer had the excuse that it provided a big revenue source for the federal government," he explained.
So in 1920, pushed by conservative temperance advocates, the United States embarked on the 'Noble Experiment,' as Prohibition was called.
Some say the experiment worked, at least in part.
"For a long period following Prohibition, drinking levels stayed down," said Amy Mittelman, who has a doctorate in US history from Columbia University and has authored a book on American beer.
"So if the goal of Prohibition was to moderate or ameliorate the effects of alcohol abuse, then to a certain extent it succeeded," she said.
"But in large cities like New York, Washington, Chicago or San Francisco, it was never accepted and that generated a degree of non-compliance and lawlessness," she said.
According to Thornton, proponents of Prohibition argued that it would "enhance democracy and the political process, reduce crime and corruption, improve health, reduce addiction."
Instead, abusive drinking increased and crime in particular violent crime doubled during the 13 years of Prohibition, he said.
"Corruption was greatly stimulated and became an occupation. It was everywhere at state, federal and local government levels.
"Organized crime came into play: there was very little in the early 20th century and then you bring in Prohibition and it becomes endemic in major American cities," spawning gangster legends such as Al Capone, he said.
Violent street gangs emerged, gaining power and money by running alcohol from bootleggers, or producers of illicit booze, to speakeasies, where the illegal drink was sold and imbibed, said Thornton.
The Noble Experiment was halted in 1933, four years after the stock market crash which plunged the United States into the Great Depression.
"State, federal and local governments were all strapped for resources, you had tax revolts going on all around the country, people protesting property taxes, school expenditures, people getting foreclosed on their properties... sound familiar?" said Thornton.
The 21st amendment repealed Prohibition on December 5, 1933, giving control of alcohol policies back to the states and allowing excise and tax revenues from alcohol to flow into public coffers.
But Prohibition was not completely erased, and to this day there are still places in the United States where you can't get a drop to drink.
Take Thornton's home state of Alabama.
"After Prohibition, they adopted a strict alcoholic beverage control system where the state itself sells whiskey and there are regulations on beer which eliminate most of the good European ones," said Thornton.
"There are many dry counties in northern Alabama as well as in other states where they still make bootleg whiskey. The bootleggers would lose their source of income if all this stuff were legalized," he said.
Alabama's pockets of "dryness" were of concern to German car manufacturer Mercedes-Benz, when it set up a factory in the state in the 1990s.
"I worked for the governor's office at the time, and around 40 executives came over from Germany," Thornton said.
"The governor's office thought they would be concerned about the labor force, the cost of electricity, transportation.
"Their major concern was about beer," he said.