Alcoholic liver disease (ALD) is major cause of chronic liver injury which results in liver fibrosis and cirrhosis. According to the surveillance report published by the National Institute on Alcohol Abuse and Alcoholism, liver cirrhosis is the 12th leading cause of death in the United States with 48 % of these deaths being attributed to excessive alcohol consumption. ALD includes a spectrum of disorders from simple steatosis to steatohepatitis, fibrosis, and hepatocellular carcinoma. Several mechanisms play a critical role in the pathogenesis of ALD. These include ethanol-induced oxidative stress and depletion of glutathione, pathological methionine metabolism, increased gut permeability and release of endotoxins into the portal blood, recruitment and activation of inflammatory cells including bone marrow-derived and liver resident macrophages (Kupffer cells). Chronic alcohol consumption results in liver damage and activation of hepatic stellate cells (HSCs) and myofibroblasts, leading to liver fibrosis. Here we discuss the current view on factors that are specific for different stages of ALD and those that regulate its progression, including cytokines and chemokines, alcohol-responsive intracellular signaling pathways, and transcriptional factors. We also review recent studies demonstrating that alcohol-mediated changes can be regulated on an epigenetic level, including microRNAs. Finally, we discuss the reversibility of liver fibrosis and inactivation of HSCs as a potential strategy for treating alcohol-induced liver damage.