BACKGROUND & AIMS: Despite high morbidity and mortality of alcoholic liver disease worldwide, the molecular mechanisms underlying alcohol-induced liver cell death are not fully understood. Transglutaminase 2 (TG2) is a cross-linking enzyme implicated in apoptosis. TG2 levels and activity are increased in association with various types of liver injury. However, how TG2 induces hepatic apoptosis is not known. METHODS: Human hepatic cells or primary hepatocytes from rats or TG2+/+ and TG2-/- mice were treated with ethanol. Mice were administered anti-Fas antibody or alcohol. Liver sections were prepared from patients with alcoholic steatohepatitis. Changes in TG2 levels, Sp1 cross-linking and its activities, expression of hepatocyte growth factor receptor, c-Met, and hepatic apoptosis were measured. RESULTS: Ethanol induced apoptosis in hepatic cells, enhanced activity and nuclear accumulation of TG2 as well as accumulation of cross-linked and inactivated Sp1, and reduced expression of the Sp1-responsive gene, c-Met. These effects were rescued by TG2 knockdown, restoration of functional Sp1, or addition of hepatocyte growth factor, whereas apoptosis was reproduced by Sp1 knockdown or TG2 overexpression. Compared with TG2+/+ mice, TG2-/- mice showed markedly reduced hepatocyte apoptosis and Sp1 cross-linking following ethanol or anti-Fas treatment. Treatment of TG2+/+ mice with the TG2 inhibitors putrescine or cystamine blocked anti-Fas-induced hepatic apoptosis and Sp1 silencing. Moreover, enhanced expression of cross-linked Sp1 and TG2 was evident in hepatocyte nuclei of patients with alcoholic steatohepatitis. CONCLUSIONS: TG2 induces hepatocyte apoptosis via Sp1 cross-linking and inactivation, with resultant inhibition of the expression of c-Met required for hepatic cell viability.