The development of alcoholic liver disease (ALD) is a complex process involving both the parenchymal and non-parenchymal cells in the liver. Enhanced inflammation in the liver during ethanol exposure is an important contributor to injury. Kupffer cells, the resident macrophages in liver, are particularly critical to the onset of ethanol-induced liver injury. Chronic ethanol exposure sensitizes Kupffer cells to activation by lipopolysaccharide via Toll-like receptor 4. This sensitization enhances production of inflammatory mediators, such as tumor necrosis factor-α and reactive oxygen species, that contribute to hepatocyte dysfunction, necrosis, apoptosis, and fibrosis. Impaired resolution of the inflammatory process probably also contributes to ALD. The resolution of inflammation is an active, highly coordinated response that can potentially be manipulated via therapeutic interventions to treat chronic inflammatory diseases. Recent studies have identified an adiponectin/ interleukin-10/heme oxygenase-1 (HO-1) pathway that is profoundly effective in dampening the enhanced activation of innate immune responses in primary cultures of Kupffer cells, as well as in an in vivo mouse model of chronic ethanol feeding. Importantly, induction of HO-1 also reduces ethanol-induced hepatocellular apoptosis in this in vivo model. Based on these data, we hypothesize that the development of therapeutic agents to regulate HO-1 and its downstream targets could be useful in enhancing the resolution of inflammation during ALD and preventing progression of early stages of liver injury.