Alcoholic liver disease (ALD) is characterized by steatosis or fat deposition in the liver and inflammation, which leads to cirrhosis and hepatocellular carcinoma. Induction of target genes without involving changes in DNA sequence seems to contribute greatly to liver injury. Chromatin modifications including alterations in histones and DNA, as well as post-transcriptional changes collectively referred to as epigenetic effects are altered by alcohol. Recent studies have pointed to a significant role for epigenetic mechanisms at the nucleosomal level influencing gene expression and disease outcome in ALD. Specifically, epigenetic alterations by alcohol include histone modifications such as changes in acetylation and phosphorylation, hypomethylation of DNA, and alterations in miRNAs. These modifications can be induced by alcohol-induced oxidative stress that results in altered recruitment of transcriptional machinery and abnormal gene expression. Delineating these mechanisms in initiation and progression of ALD is becoming a major area of interest. This review summarizes key epigenetic mechanisms that are dysregulated by alcohol in the liver. Alterations by alcohol in histone and DNA modifications, enzymes related to histone acetylation such as histone acetyltransferases, histone deacetylases and sirtuins, and methylation enzymes such as DNA methyltransferases are discussed. Chromatin modifications and miRNA alterations that result in immune cell dysfunction contributing to inflammatory cytokine production in ALD is reviewed. Finally, the role of alcohol-mediated oxidative stress in epigenetic regulation in ALD is described. A better understanding of these mechanisms is crucial for designing novel epigenetic based therapies to ameliorate ALD.