Alcohol-induced tissue damage results from associated nutritional deficiencies as well as some direct toxic effects, which have now been linked to the metabolism of ethanol. The main pathway involves liver alcohol dehydrogenase which catalyzes the oxidation of ethanol to acetaldehyde, with a shift to a more reduced state, and results in metabolic disturbances, such as hyperlactacidemia, acidosis, hyperglycemia, hyperuricemia and fatty liver. More severe toxic manifestations are produced by an accessory pathway, the microsomal ethanol oxidizing system involving an ethanol-inducible cytochrome P450 (2E1). After chronic ethanol consumption, there is a 4- to 10-fold induction of 2E1, associated not only with increased acetaldehyde generation but also with production of oxygen radicals that promote lipid peroxidation. Most importantly, 2E1 activates many xenobiotics to toxic metabolites. These include solvents commonly used in industry, anaesthetic agents, medications such as isoniazid, over the counter analgesics (acetaminophen), illicit drugs (cocaine), chemical carcinogens, and even vitamin A and its precursor beta-carotene. Furthermore, enhanced microsomal degradation of retinoids (together with increased hepatic mobilization) promotes their depletion and associated pathology. Induction of 2E1 also yields increased acetaldehyde generation, with formation of protein adducts, resulting in antibody production, enzyme inactivation, decreased DNA repair, impaired utilization of oxygen, glutathione depletion, free radical-mediated toxicity, lipid peroxidation, and increased collagen synthesis. New therapies include adenosyl-L-methionine which, in baboons, replenishes glutathione, and attenuates mitochondrial lesions. In addition, polyenylphosphatidylcholine (PPC) fully prevents ethanol-induced septal fibrosis and cirrhosis, opposes ethanol-induced hepatic phospholipid depletion, decreased phosphatidylethanolamine methyltransferase activity and activation of hepatic lipocytes, whereas its dilinoleoyl species increases collagenase activity. Current clinical trials with PPC are targeted on susceptible populations, namely heavy drinkers at precirrhotic stages.