Alcohol can produce hepatic steatosis several mechanisms, such as increased fatty acid synthesis, decreased triglyceride utilization, decreased atty acid oxidation, decreased lipoprotein excretion, and increased lipolysis. Ethanol is taken up by the liver and is conveed into acetaldehyde by either alcohol dehydrogenase (the major pathway), microsomal P-450 oxidase, or peroxisomal catalase. These pathways also conve nicotinamide adenine dinucleotide (NAD) to NADH. This excess production of NADH changes the normal hepatic metabolism away from catabolism of fats and toward anabolism of fats (lipid synthesis), resulting in decreased mitochondrial oxidation of fatty acids and increased hepatic production of triglyceride. Ethanol also increases lipolysis and inhibits the release of lipoproteins. Increased lipolysis increases the amount of free fatty acids that reach the liver. Reference: Robbins & Cotran Pathologic Basis of Disease, 9edition