We describe the design, performance and scientific objectives of the NASA-funded ALICE instrument aboard the ESA Rosetta asteroid flyby/comet rendezvous mission. ALICE is a lightweight, low-power, and low-cost imaging spectrograph optimized for cometary far-ultraviolet (FUV) spectroscopy. It will be the first UV spectrograph to study a comet at close range. It is designed to obtain spatially-resolved spectra of Rosetta mission targets in the 700 2050 Å spectral band with a spectral resolution between 8 Å and 12 Å for extended sources that fill its ∼0.05^ × 6.0^ field-of-view. ALICE employs an off-axis telescope feeding a 0.15-m normal incidence Rowland circle spectrograph with a toroidal concave holographic reflection grating. The microchannel plate detector utilizes dual solar-blind opaque photocathodes (KBr and CsI) and employs a two-dimensional delay-line readout array. The instrument is controlled by an internal microprocessor. During the prime Rosetta mission, ALICE will characterize comet 67P/Churyumov-Gerasimenko's coma, its nucleus, and nucleus/coma coupling; during cruise to the comet, ALICE will make observations of the mission's two asteroid flyby targets and of Mars, its moons, and of Earth's moon. ALICE has already successfully completed the in-flight commissioning phase and is operating well in flight. It has been characterized in flight with stellar flux calibrations, observations of the Moon during the first Earth fly-by, and observations of comet C/2002 T7 (LINEAR) in 2004 and comet 9P/Tempel 1 during the 2005 Deep Impact comet-collision observing campaign.