Polyaniline in its emeraldine salt form has been prepared on graphite coated cellulose through vapor phase polymerization technique to prepare polyaniline encapsulated graphite (PANI-G) system. The resistive response of polyaniline in alcoholic medium has been reported in this article. The prepared PANI-G system appeared crystalline as revealed from X-ray diffraction measurements. π electrons from graphite facilitates the electronic conduction mechanism of polaron defect states in polyaniline, and are responsible for observed electronic behavior of polyaniline film and its response with the presence of methanol. The interaction of coupled polaron and electrons of PANI-G with alcohol, and thus the variation of resistivity of the PANI-G films has been the basis of this work for preparing an alcohol sensor. The OH− ion of alcohol localizes the coupled polaron-electron in alcoholic medium. Higher the concentration of alcohol higher is the polaron-electron localization and thus greater is the resistivity. Resistive methanol sensitivity of 11.2 has been obtained at pure methanol.