Oxidation of ethanol via alcohol dehydrogenase (ADH) explains various metabolic effects of ethanol but does not account for the tolerance. This fact, as well as the discovery of the proliferation of the smooth endoplasmic reticulum (SER) after chronic alcohol consumption, suggested the existence of an additional pathway which was then described by Lieber and DeCarli, namely the microsomal ethanol oxidizing system (MEOS), involving cytochrome P450. The existence of this system was initially challenged but the effect of ethanol on liver microsomes was confirmed by Remmer and his group. After chronic ethanol consumption, the activity of the MEOS increases, with an associated rise in cytochrome P450, especially CYP2E1, most conclusively shown in alcohol dehydrogenase negative deer mice. There is also cross-induction of the metabolism of other drugs, resulting in drug tolerance. Furthermore, the conversion of hepatotoxic agents to toxic metabolites increases, which explains the enhanced susceptibility of alcoholics to the adverse effects of various xenobiotics, including industrial solvents. CYP2E1 also activates some commonly used drugs (such as acetaminophen) to their toxic metabolites, and promotes carcinogenesis. In addition, catabolism of retinol is accelerated resulting in its depletion. Contrasting with the stimulating effects of chronic consumption, acute ethanol intake inhibits the metabolism of other drugs. Moreover, metabolism by CYP2E1 results in a significant release of free radicals which, in turn, diminishes reduced glutathione (GSH) and other defense systems against oxidative stress which plays a major pathogenic role in alcoholic liver disease. CYP1A2 and CYP3A4, two other perivenular P450s, also sustain the metabolism of ethanol, thereby contributing to MEOS activity and possibly liver injury. CYP2E1 has also a physiologic role which comprises gluconeogenesis from ketones, oxidation of fatty acids, and detoxification of xenobiotics other than ethanol. Excess of these physiological substrates (such as seen in obesity and diabetes) also leads to CYP2E1 induction and nonalcoholic fatty liver disease (NAFLD), which includes nonalcoholic fatty liver and nonalcoholic steatohepatitis (NASH), with pathological lesions similar to those observed in alcoholic steatohepatitis. Increases of CYP2E1 and its mRNA prevail in the perivenular zone, the area of maximal liver damage. CYP2E1 up-regulation was also demonstrated in obese patients as well as in rat models of obesity and NASH. Furthermore, NASH is increasingly recognized as a precursor to more severe liver disease, sometimes evolving into "cryptogenic" cirrhosis. The prevalence of NAFLD averages 20% and that of NASH 2% to 3% in the general population, making these conditions the most common liver diseases in the United States. Considering the pathogenic role that up-regulation of CYP2E1 also plays in alcoholic liver disease (vide supra), it is apparent that a major therapeutic challenge is now to find a way to control this toxic process. CYP2E1 inhibitors oppose alcohol-induced liver damage, but heretofore available compounds are too toxic for clinical use. Recently, however, polyenylphosphatidylcholine (PPC), an innocuous mixture of polyunsaturated phosphatidylcholines extracted from soybeans (and its active component dilinoleoylphosphatidylcholine), were discovered to decrease CYP2E1 activity. PPC also opposes hepatic oxidative stress and fibrosis. It is now being tested clinically.