In this study, a nonionic surfactant (PEG-40 hydrogenated castor oil, Abbrev. PEG-40 HCO) was used to improve the corrosion resistance of carbon steel in simulated fuel-grade ethanol (SFGE). The studies were conducted using cyclic voltammetry (CV) and potentiodynamic polarization techniques and complemented by scanning electron microscopy (SEM) investigations. The presence of water and chloride ions in SFGE strongly influences the electrochemical behavior of carbon steel. Polarization curves indicate that PEG-40 HCO has good inhibition efficiency and behaves as a mixed inhibitor. The inhibition efficiency increases with the concentration of PEG-40 HCO within the range of 20 to 100 ppm, reaching a maximum value of 93.8%. The adsorption of PEG-40 HCO obeys the Langmuir adsorption isotherm. Quantum chemical calculations were evaluated to confirm experimental results.