Alcoholic liver disease remains one of the most common causes of chronic liver disease in the world. The severity of liver damage related to alcohol varies among different individuals and even within any given individual at different times. Certain symptoms, signs, and abnormal findings on laboratory tests help clinicians distinguish among the various stages of alcohol-induced liver damage and, thus, have some prognostic significance. However, because all stages of this disease can persist for decades without causing overt evidence of serious liver damage, liver biopsy is the only test that can reliably distinguish among the various stages of alcohol-induced liver damage in many patients. The therapy of alcohol-induced liver disease varies according to the severity of histologic liver damage and clinically overt portal hypertension and hepatic dysfunction. Abstinence from alcohol consumption improves the clinical outcome of all stages of alcoholic liver disease. However, only two agents have proved to lessen early mortality in patients who require hospitalization for acutely decompensated alcoholic liver disease. It is not known whether either of these agents or other treatments prevent the development of alcohol-induced cirrhosis or improve the survival of patients who have already developed cirrhosis.