Adipose tissue represents a large volume of biologically active tissue that exerts substantial systemic effects in health and disease. Alcohol consumption can profoundly disturb the normal functions of adipose tissue by inducing adipocyte death and altering secretion of adipokines, pro-inflammatory mediators and free fatty acids from adipose tissue, which have important direct and indirect effects on the pathogenesis of alcoholic liver disease (ALD). Cessation of alcohol intake quickly reverses inflammatory changes in adipose tissue, and pharmacological treatment that normalizes adipose tissue function improves experimental ALD. Obesity exacerbates liver injury induced by chronic or binge alcohol consumption, and obesity and alcohol can synergize to increase risk of ALD and progression. Physicians who care for individuals with ALD should be aware of the effects of adipose tissue dysfunction on liver function, and consider strategies to manage obesity and insulin resistance. This Review examines the effect of alcohol on adiposity and adipose tissue and the relationship between alcohol, adipose tissue and the liver.