Chronic alcohol abuse is an important cause of morbidity and mortality throughout the world. Liver damage due to chronic alcohol intoxication initially leads to accumulation of lipids within the liver and with ongoing exposure this condition of steatosis may first progress to an inflammatory stage which leads the way for fibrogenesis and finally cirrhosis of the liver. While the earlier stages of the disease are considered reversible, cirrhotic destruction of the liver architecture beyond certain limits causes irreversible damage of the organ and often represents the basis for cancer development. This review will summarize current knowledge about the molecular mechanisms underlying the different stages of alcoholic liver disease (ALD). Recent observations have led to the identification of new molecular mechanisms and mediators of ALD. For example, plasminogen activator inhibitor 1 was shown to play a central role for steatosis, the anti-inflammatory adipokine, adiponectin profoundly regulates liver macrophage function and excessive hepatic deposition of iron is caused by chronic ethanol intoxication and increases the risk of hepatocellular carcinoma development.