The present review spans a broad spectrum of topics dealing with alcoholic liver disease (ALD), including clinical and translational research. It focuses on the role of the immune system and the signaling pathways of cytokines in the pathogenesis of ALD. An additional factor that contributes to the pathogenesis of ALD is lipopolysaccharide (LPS), which plays a central role in the induction of steatosis, inflammation, and fibrosis in the liver. LPS derived from the intestinal microbiota enters the portal circulation, and is recognized by macrophages (Kupffer cells) and hepatocytes. In individuals with ALD, excessive levels of LPS in the liver affect immune, parenchymal, and non-immune cells, which in turn release various inflammatory cytokines and recruit neutrophils and other inflammatory cells. In this review, we elucidate the mechanisms by which alcohol contributes to the activation of Kupffer cells and the inflammatory cascade. The role of the stellate cells in fibrogenesis is also discussed.