There is a growing appreciation that adipose tissue is a multifunctional organ. In addition to its central role in lipid storage, adipose tissue secretes a diverse group of proteins, called adipokines, involved in lipid metabolism, insulin sensitivity, angiogenesis etc. Adipocytes also secrete various inflammatory and anti-inflammatory mediators. Adiponectin, an adipokine with potent anti-inflammatory properties, is thought to play an important role in the regulation of inflammation. The development of alcoholic liver disease is thought to involve increased pro-inflammatory activity, mediated in part by the activation of Kupffer cells. Chronic ethanol feeding sensitizes Kupffer cells to activation by lipopolysaccharide (LPS), leading to increased production of reactive oxygen species (ROS) and tumor necrosis factor-alpha (TNF-alpha). Recent studies have demonstrated a hepato-protective effect of adiponectin in the progression of alcoholic liver disease. Herein are summarized recent data demonstrating that adiponectin treatment can normalize LPS-stimulated ROS production and TNF-alpha expression in Kupffer cells after chronic ethanol feeding. These studies suggest that the hepato-protective activity of adiponectin is due, at least in part, to a direct anti-inflammatory effect of adiponectin on Kupffer cells.