The pathogenesis of alcohol-induced liver disease (ALD) is still poorly understood. One of the clues to its progression relates to the alcohol-mediated susceptibility of hepatocytes to cell death by reactive oxygen species (ROS) and inflammatory cytokines. Tumor necrosis factor alpha (TNF) has been considered a key ALD mediator with acidic sphingomyelinase (ASMase)-mediated ceramide generation playing a critical role. TNF receptor 1 and 2 knock-out mice or ASMase(-/-) mice exhibit resistance to alcohol-mediated fatty liver and cell death. Furthermore, alcohol feeding has been shown to sensitize hepatocytes to TNF due to the limitation of mitochondrial glutathione (mGSH) through impaired import of GSH from the cytosol due to altered membrane order parameter caused by mitochondrial cholesterol increase. Selective pharmacological depletion of mGSH sensitizes hepatocytes to TNF-mediated cell death, which reproduces the observations found with alcohol feeding. TNF signaling analyses in hepatocytes with or without mGSH depletion indicate that mGSH prevents cardiolipin peroxidation (CLOOH) formation by TNF-induced ROS via ASMase and that CLOOH cooperates with oligomerized Bax to cause mitochondrial outer membrane permeabilization through destabilization of the lipid bilayer via increased bilayer-to-inverted hexagonal phase transitions. Thus, activation of ASMase and cholesterol-mediated mGSH depletion both collaborate to promote alcohol-induced TNF-mediated hepatocellular damage, suggesting novel therapeutic opportunities in ALD.