Methanol is toxic by two mechanisms:
First, methanol can be fatal due to its CNS depressant properties in the same manner as ethanol poisoning.
Second, in a process of toxication, it is metabolized to formic acid via formaldehyde in a process initiated by the enzyme alcohol dehydrogenase in the liver. Methanol is converted to formaldehyde via alcohol dehydrogenase (ADH) and formaldehyde is converted to formic acid (formate) via aldehyde dehydrogenase (ALDH).
Formate is toxic because it inhibits mitochondrial cytochrome c oxidase, causing hypoxia at the cellular level, and metabolic acidosis, among a variety of other metabolic disturbances.