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I n North America, liver disease due to alcohol consumption is an important cause of death in adults, although its pathogenesis remains obscure. Despite the fact that resident hepatic macrophages are known to contribute to early alcohol-induced liver injury via oxidative stress, the exact source of free radicals has remained a mystery. To test the hypothesis that NADPH oxidase is the major source of oxidants due to ethanol, we used p47^phox knockout mice, which lack a critical subunit of this major source of reactive oxygen species in activated phagocytes. Mice were treated with ethanol chronically, using a Tsukamoto-French protocol, for 4 weeks. In wild-type mice, ethanol caused severe liver injury via a mechanism involving gut-derived endotoxin, CD14 receptor, production of electron spin resonance–detectable free radicals, activation of the transcription factor NF-κB, and release of cytotoxic TNF-α from activated Kupffer cells. In NADPH oxidase–deficient mice, neither an increase in free radical production, activation of NF-κB, an increase in TNF-α mRNA, nor liver pathology was observed. These data strongly support the hypothesis that free radicals from NADPH oxidase in hepatic Kupffer cells play a predominant role in the pathogenesis of early alcohol-induced hepatitis by activating NF-κB, which activates production of cytotoxic TNF-α.